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2021-12-31-accounts

Federation of British Artists Limited (The)

Report of the Board and Consolidated Financial Statements

31 December 2021

Company Limited by Guarantee Registration Number 683275 (England and Wales)

Charity Registration Number 200048

Contents

Reports
Legal and administrative information 3
Chairman’s foreword 4
Report of the Board 5
Independent auditor’s report
to the Members 20
Financial Statements
Consolidated statement of financial
activities 25
Balance sheets 26
Consolidated statement of cash flows 27
Principal accounting policies 28
Notes to the financial statements 33

The Federation of British Artists Limited 2

Chairman’s foreword

Directors and Trustees The following trustees and officers were in office
during the year and since the year-end:
Alastair Adams RP
Linda Alexander ROI
David Brammeld RBA (resigned 12thOctober
2021)
Tessa Coleman NEAC (appointed 12thOctober
2021)
Mick Davies RBA (appointed 12thOctober 2021)
Jeannette Corina De Lacey PS (resigned 12th
October 2021)
Eela Devani
Jonathan French
Jonathan Glasspool (Chairman)
David Glazebrook
Robin Hazlewood RI
Martin Howarth HH (appointed 12thOctober 2021)
Geoffrey Huband RSMA
Nicholas Pollard SWLA
Alan Power HH (resigned 12thOctober 2021)
Richard Rees PS (appointed 12thOctober 2021)
Executive Team Clare O’Brien (CEO)
Amy Huntington (Head of Exhibitions and Events)
Eamonn Bambury (Director of Finance and
Operations)
Addi Aegisdottir (Head of Sales and Marketing)
Auditor Buzzacott LLP
130 Wood Street
London EC2V 6DL
Solicitor Stone King LLP
16 St John’s Lane
London EC1M 4BS
Banker Barclays Bank plc
Level 27
1 Churchill Place
London E14 5HP

The Federation of British Artists Limited 3

Chairman's foreword Sotrety W8s still in the throes of the global pandemic as 2021 began. We were not able to re- open the doors of Mall Galleries until 14 April. Life continued lo be disrupted. We are extremely grateful to those who appreciate figurative art and who continued to view online. visit once we had rè-opened.. and buy works, thus supporting living artists who have struggled like many in these past years. 786 works ol art werè bought and 45 portraits commissioned. This is an increase from happier trading limes in 2019 of +39%. We used the time when wè were c105ed lo consult with the Federation's nine membèrart soryelie5 and presidents as regaids their art society priorities for the Federation. Each society un8llimously reported back that it is the galleries themselves and their strategic location which drives the rnernbership. With this in mind and despitè our rèsÈrvÈs suffering On￿ again. we start 2022 with the aim lo rebuild our finances so that we ¢an remain al Mall Galleries. We will do this by maintaining art sales and wmrnis5ions and extending the gallery hirè offer", re-posrtioning to attract a pool of new buyeis whilst encouraging current supporters". and ￿t￿rning to developing 8nd nurturing figurative artists of the future through our own inilialives and introducing them to our member art soaelies. We believe Ihat the trading environment will be more difficult in 2022 and into 2023, bul we will work hard lo continue our tenancy in our spacious and rnodern galleries and stage excellent exhibitions of contemporary figurativè art. We would like lo thank Crown Estate, our landlords. for reduang the rent on the property and the govemment and Westminster c￿unCl1 for business grants and the job relenlion scheme during 2021. We have reviewed our vision and mission to add the values by which we operate. Al our heart is championing figurative art and cwnecling art15ts with the public. We do this by supporting living artists through exhibiting, promoting. selling. rewarding and (x)mm15s10ning Iheii work, and offering learning and engagement opportunities for all. Our valuès- The Federation of British Artists fosters quality and ambltlon in Its work. and the work of artists. The FBA strives lo be inclusive in its support to artists 3nd engagement with the public. As a champion of contemporary figurative art. based on the world around us, the Federation is cc*mmitted to sustainability. We rely on our knowledgeable trustees and compelenl tearll to deliver the results and stage such a high turn-around Of exhibitions An organisational restructure look place to extend our skills further into the digital arena and create efficiencies. 2022 will see the benefits of this. We'd like to thank our staff for the resilience and grit they have shown during a difficult year for the gallery. Our thanks go lo all the arlists who exhibil with us, for their determination and creatimly during these challenging Iwo years. We look forwar(S lo Wel￿mIng everyone to Mall Galleries which are happily open and lively oncè again. Jonathan Glasspool Chairman reo, CEO The Federation of British Artists Limited 4

Report of the Board 31 December 2021

The Board of Trustees (the “Board”) is pleased to present the annual report and review of the Federation of British Artists (the “Federation”), together with the consolidated financial statements of the Federation and its subsidiary company Mall Galleries Trading Limited for the financial year ended 31 December 2021. This report has been prepared in accordance with Part 8 of the Charities Act 2011.

The financial statements have been prepared in accordance with the accounting policies set out on pages 28 to 32 and comply with the charity’s 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 United Kingdom and Republic of Ireland (FRS 102).

Structure, Governance and Management

Structure

The Federation of British Artists Limited was established as a company limited by guarantee and is governed by a Memorandum and Articles of Association dated 13 February 1961. In October 2009 the company’s Articles were updated to comply with the requirements of the Companies Act 2006. These revised Articles have been filed at Companies House and with the Charity Commission.

The company, which does not have share capital, is registered as a charity with the Charity Commission and manages a large, modern gallery space - Mall Galleries - in the heart of central London.

There are nine member art societies, each of which brings a long and distinguished heritage to the Federation. Eight of these members are also registered charities: Royal Institute of Painters in Water Colours, Royal Society of British Artists, Royal Society of Marine Artists, Royal Society of Portrait Painters, Royal Institute of Oil Painters, New English Art Club, Pastel Society and Society of Wildlife Artists. The ninth member is the Hesketh Hubbard Art Society, London’s largest life-drawing group.

The Board of Trustees is responsible for governance and control of the company and meets at least four times a year. The delivery of the charity’s objectives and the Board’s policy-making decisions are delegated to the staff of the Federation under the direction of the chief executive officer.

Appointment of Trustees

Members of the Board constitute directors of the charitable company for the purposes of the Companies Act 2006 and trustees of the charitable company for the purposes of charity legislation.

The Federation of British Artists Limited 5

Report of the Board 31 December 2021

Structure, Governance and Management (continued)

Appointment of Trustees (continued)

The Board comprises a maximum of nine elected trustees, each of whom is recruited from and by the representatives of the nine member art societies of the Federation at a general meeting of the company. Additionally, up to six co-opted trustees may also be appointed. These trustees are recruited by personal contact for the expertise they bring in areas such as marketing, legal affairs and finance. Existing trustees carry out an assessment of each new trustee’s skills in order to evaluate their potential contribution to the charity’s development before they are appointed. The members of the Board elect the chairman.

On election or co-option to the Board, trustees are sent a pack of relevant documents to enable them to understand their legal responsibilities as directors and to fulfil their responsibilities as trustees of the charity. This pack comprises the company’s Articles of Association, advice on disclosure of interests, financial statements and minutes of the board meetings for the previous year. All members of the Board receive regular information from the Director and Secretary on matters relating to the Federation and its future plans, as well as to more general matters relating to charity governance. Elected trustees already have a good understanding of the Federation and how it is organised through their membership of one of the constituent art societies.

All trustees retire by rotation every three years and are eligible for re-election to serve up to a maximum of six years continuously. After six continuous years of service they are not eligible for re-election for at least one year.

Organisation

The CEO is responsible for the day-to-day management of the charity and for implementing all policy decisions determined by the Board. An Executive team, comprising a Director of Finance and Operations, the Head of Exhibitions and Events and the Head of Sales and Marketing support the CEO.

While still retaining final responsibility, the Board delegates oversight of certain important areas of governance to three committees, each of which reports to and is accountable to the Board. These committees include the Finance and Budget Committee, which considers all matters relating to finance, the charity’s annual budget, investments, remuneration and risk management; the Exhibitions Committee, which monitors overall standards and evaluates all non-member exhibitions for their contribution to furthering the objectives of the charity; and the Education Committee, the function of which is to further the educational initiatives of the Federation.

The key management personnel of the charity in charge of directing, controlling, running and operating the charity comprise the Trustees, the CEO and the Executive team. Remuneration of the CEO and the Executive team is overseen by the charity’s Finance and Budget Committee, with reference to industry benchmarking. The same Committee advises and assists with personnel, recruitment and disciplinary issues when required.

The Federation of British Artists Limited 6

Report of the Board 31 December 2021

Structure, Governance and Management (continued)

Organisation (continued)

The Federation is an equal opportunities employer. Recruitment criteria and procedures ensure that individuals are selected, promoted and treated on the basis of their relevant merits and abilities. Where appropriate and possible, special training is provided to enable employees to progress.

The trading activities of the Federation are conducted by Mall Galleries Trading Limited, the charity’s wholly owned trading subsidiary, incorporated in England and Wales in July 2007 (registered number 06315430). The company has a licence from the charity to operate all sponsorship and retailing activities on behalf of the charity. It donates all its profits in the year to the Federation by way of Gift Aid.

Risk Management

The Executive team and Board have a strategy for the management of risks faced by the charity. Risk processes are kept under constant review and comprise the following key controls:

Through the implementation of these risk management controls, the Board has evaluated the main financial and non-financial risks to the organisation and is satisfied that the risks identified are adequately monitored and managed.

The key risks for the charity, as identified by the trustees, are described below, together with the principal ways in which they are mitigated:

Disruption cause by Covid-19

The impact of Covid-19 on the business has been significant, however the healthy reserves, cash balance, the government job retention scheme and other government grants along with other expenditure savings have enabled the organisation to plan for a resilient future, whilst safeguarding the safety of the FBA’s staff and its visitors. Longer term budget planning, modelling cost-effective approaches to achieving the organisation’s objectives and reducing expenditure all contribute towards ensuring the FBA is a going concern.

The following is the impact on the gallery’s activities in 2021 and our actions to mitigate the risk:

The Federation of British Artists Limited 7

Report of the Board 31 December 2021

Structure, Governance and Management (continued)

Risk management (continued)

Mitigation:

Premises

The Federation operates from Grade 1-listed premises built in 1863. The age of the building requires us to undertake continuous monitoring for repairs and maintenance. Issues identified in the Fire Risk Assessment each year are assessed and prioritised for attention.

Water ingress and other faults arising within the building and, in particular, within the charity’s Learning Centre require frequent vigilance.

The unusable parts of the Learning Centre have been closed and were impaired in the 2020 accounts. We were able to run Hesketh Hubbard life drawing classes in the gallery in the 2[nd] half of 2021, of course adhering to strict Covid-19 guidelines.

In cooperation with the charity’s landlord, security issues and fire alarm resources are monitored continuously.

The Federation of British Artists Limited 8

Report of the Board 31 December 2021

Structure, Governance and Management (continued)

Risk management (continued)

Gallery Operations

Regular servicing of the gallery’s principal air conditioning and heating unit is required to maintain the operational efficiency of the system, installed in 2016.

A Major Incident Response protocol has been developed to manage incidents comprising an actual or suspected threat from inside or outside the premises.

The volume of visitors at all our exhibitions and events is monitored to ensure Mall Galleries complies with Westminster City Council licensing requirements.

Organisation & Governance

All pay reviews are evaluated for impact on operational and financial performance.

Staffing issues, including new appointments and where appropriate, disciplinary matters, are escalated by the executive team to the Finance and Budget Committee.

Reputational risks are evaluated at each quarterly Finance and Budget Committee meeting.

A comprehensive review of operating platforms and databases was initiated in 2017, to enable the charity to ensure compliance with the new and stronger controls over the use of personal data (General Data Protection Regulations).

Data security issues and controls are monitored and enhancements made to protect data from systems failures.

Finance

Cash flow is kept under continual review. Achieving and maintaining the charity’s agreed level of free reserves is a priority monitored by the Board.

The combination of quarterly statements together with a rigorous forecasting process alerts the Finance and Budget Committee and trustees to any variances requiring attention.

The charity’s financial priorities, as set out and agreed by the trustees or identified during the annual audit, are kept under constant review.

The Federation of British Artists Limited 9

Report of the Board 31 December 2021

Objectives of the Charity

Our Mission Statement

The Federation aims to provide a national focal point for contemporary figurative and representational art in a variety of different mediums and genres by living artists.

The charity encourages and promotes the practice and appreciation of the visual arts. We champion young and emerging talent, together with well-established artists.

Education and accessibility lie at the heart of the Federation. The charity is committed to offering an active programme of education to diverse audiences. The charity also aims to make its exhibitions and activities accessible to the widest number of visitors and age groups.

The Federation sets out to achieve these objectives by:

After consideration of the Charity Commission’s guidance on public benefit, the Board regards these initiatives, together with our commitment to accessibility, as important means of delivering public benefit.

In order to finance these activities, the Federation is reliant for the majority of its income on donations, sponsorship, sales commissions, gallery rental, our Friends, patrons and membership fees. We receive no regular government funding, other than Covid-19 support.

The Federation of British Artists Limited 10

Report of the Board 31 December 2021

Review of Achievements and Performance

Exhibitions – a summary

A total of 23 exhibitions were hosted in 2021 between April and December:

x22 physically staged at Mall Galleries x1 took place online only.

These included:

x8 Federation of British Artists, Society Annual Exhibitions x2 FBA Initiatives.

Gallery Hire: x3 Art Exhibitions and Auction Showcase x3 Solo Exhibitions x1 Art Prize x5 Group Exhibitions x1 International Group Exhibition

Full list of Exhibitions staged in 2021:

FBA Society Annual Exhibitions

FBA Initiatives

Art Exhibition and Auction Showcase

Solo Exhibitions

Art Prize

International Groups

The Federation of British Artists Limited 11

Report of the Board 31 December 2021

Review of Achievements and Performance (continued)

Full list of Exhibitions staged in 2021 (continued)

Group Exhibitions

Artworks

Federation of British Artists (FBA) exhibition highlights:

We were pleased to welcome over 14 weeks of Non-FBA exhibitions to the gallery when possible to do so. Exhibition highlights included:

The Federation of British Artists Limited 12

Report of the Board 31 December 2021

Review of Achievements and Performance (continued)

Visitors to the Galleries and online digital engagement

Website:

Education and Learning

Over the course of 2021, the Federation of British Artists facilitated many events on behalf of its member art societies: initially online, while Mall Galleries was closed, then physically, inperson, once the gallery re-opened to the public.

Online events included a painting demonstration by artist Tony Allain on behalf of the Pastel Society; president’s video and virtual tour by Mick Davies, President of the Royal Society of British Artists; a live performance of music and art for the Royal Institute of Painters in Water Colours, titled ‘Chromatikon’; and a studio tour by Tim Benson, representing the Royal Society of Portrait Painters.

Physical events included the New English Art Club’s Annual Lecture on the subject of 'Sickert and the Art of Music Hall’; an evening of Sea Shanties and Drawing with the Morris Folk Choir at the Royal Society of Marine Artists Annual Exhibition; portfolio reviews by the President and members of the Society of Wildlife Artists; and the annual art event evening and paint live competition by the Royal Institute of Oil Painters.

Supporters

We are very grateful to Mall Galleries Friends for their invaluable support. We would also like to thank Foundation Derbyshire for supporting Ed Burke’s residency and exhibition.

Developing our Resources

Improvements to the infrastructure continue to be paramount – we built on the development projects already started, where we created an integrated customer relationship management system, an update to the online payment platform and improved the financial processes via SAGE Pay. In 2021 we migrated our Deep Thought (Filemaker Pro system) to become a sales and CRM tool.

The Federation of British Artists Limited 13

Report of the Board 31 December 2021

Review of Achievements and Performance (continued)

Developing our Resources (continued)

We also upgraded our gallery hire packages to support active selling. We are well positioned as a professional and competitive gallery hire space going into 2022.

We also enhanced our processes supporting our portrait commission activity.

Future Plans

In 2022, post pandemic, our aims are to recover revenue to pre-pandemic levels by

Financial review and policies

Results for the Year

The Federation made an operating loss in 2021 of £93,591 compared to a loss in 2020 of £339,150. This improvement was supported by higher income, while expenditure remained flat.

Total income of £1,378,277 was £252,002 higher than in 2020 (£1,126,275). The Gallery was closed from January until April 14[th] due to Covid-19 restrictions, which was an improvement from the previous year which was highly disrupted. Income from External Exhibitions and Events was therefore higher by £171,764 driven by a much better 2[nd] half of 2021. Commissions for society art sales were very positive, driven by much higher Society sales in the gallery and on-line, higher by £99,622. Portrait commission income was higher by £64,532 as artists and clients were able to once again run physical sittings needed to complete their work. Income from artists submitting their work to be selected for the society shows were higher by £52,900 as artists were very keen to showcase their wonderful work. Our Membership income was impacted, as our Hesketh Hubbard members were only able to access classes for 6 months, a reduction of £24,579. Furlough income from the Government scheme generated £82,206 a reduction of £64,820 from 2020.

Our income from charitable activities was higher by £361,073, supported by higher overall commissions of £147,278, mainly from Society shows and Portrait commission. All the society shows were sold on-line and physically this year, generating good sales and we finished 43% ahead of prior year. Non society income from hiring the galleries was positive in the 2[nd] half of 2021, but was impacted by Covid-19 in the first 6 months.

The Federation of British Artists Limited 14

Report of the Board 31 December 2021

Financial review and policies (continued)

Results for the Year (continued)

Overall expenditure was flat at £1,471,868 versus 2020. We had higher rent costs of £61,694, as we received a larger rent holiday from our Landlord in 2020 versus 2021. This was offset by having lower staff costs and lower investment in website and IT developments. Charitable activities which makes up the majority of our expenditure was also flat.

Salaries formed 56% of our total costs and were lower than in 2020 which was 58%. We appreciate the staff are the most valued asset of the organisation without which we cannot operate.

Our overall cash position of £565,373 at the end of December 2021 shows a reduction of £131,950 driven by the impact of Covid-19 on our Exhibition and Events hires, however we are still in a good cash position which will give the Federation resilience in the face of ongoing impacts in 2022 of the pandemic and the cost of living crises.

Sources of Income and Expenditure

----- Start of picture text -----
Source of Income 2021
Investment Income & Other Subscriptions Exhibition Receipts
Sales Commissions Visiting Exhibitions/Events
----- End of picture text -----

The Federation of British Artists Limited 15

Report of the Board 31 December 2021

Financial review and policies (continued)

Sources of Income and Expenditure (continued)

Our Policies

The Federation has written policies and guidelines in place to cover the wide-ranging areas of our business, encompassing everything from the management of our premises and energy efficiency to promoting best practice in the wider arts sector.

These policies include: Health & Safety Policy, Energy Policy, Learning Centre Management & Maintenance Plan, Education Policy, Learning Centre Protocols, Child Protection and Safeguarding Vulnerable Adult Policy, Volunteer Policy, Access Statement and Intellectual Property Policy.

All Federation employees are required to understand and comply with these policies, which we review annually to ensure they are suitable for the organisation’s structure and objectives. We strive to update our policies through on-going consultations with FBA Trustees, staff, artists and partners, as well as from public feedback.

Pricing Policy

Accessibility is a key element of our public benefit offering. We are committed to enabling as many people as possible to view our exhibitions and to participate in activities, regardless of their income and ability to pay. We charge a modest fee to enter some of our exhibitions at Mall Galleries. However, we offer concessions for local groups and networks, as well as for all students and visitors aged 65 or over. Friends and Patrons of Mall Galleries and all visitors under 25 years of age obtain free admission to all exhibitions.

The Federation of British Artists Limited 16

Report of the Board 31 December 2021

Financial review and policies (continued)

Investment Policy

No Investments were held by the Federation as at 31 December 2021. All future investments will be impacted by the need to use cash reserves to support the organisation during the recovery from the Covid-19 pandemic.

Interest on funds held in bank deposit accounts was £41 (2020: £1,072). Interest rates continue to be very low.

Reserves Policy and Going concern

The balance sheet shows total reserves of £792,411 (2020 - £886,002) consisting of restricted funds of £25,409 (2020 - £25,409) designated funds of £501,333 (2020 - £521,192) and free reserves of £265,669 (2020 - ££339,401).

In the restricted education fund, income included £1,500 of donations from Patrons. Resources expended on educational programmes during the year amounted to £1,550. The unused balance carried forward of £25,409 will go towards a similar project to the In the Studio project.

Designated funds consist of the premises maintenance fund for external painting and the tangible fixed assets fund. As the planned work in 2020 did not happen that year due to Covid19, it was decided to keep the fund at £80,000 in 2021, which is sufficient to cover future maintenance and the cost of the external painting.

New designations of £50,455 were made to the fixed assets designated fund to provide new IT and office equipment, replacement of the disabled lift in the gallery and upgrades of the lighting and wiring. The opening balance of £441,192 at 1 January 2021, the new designations of £50,455 less the released amount of £70,314 depreciation leaves a balance carried forward as at 31 December 2021 of £421,333. The tangible fixed assets fund recognises that the tangible fixed assets are required for the day-to-day operation of the charity and are not available for other purposes or general reserves.

Free reserves in the general fund amount to £265,669 (2020 - £339,401).

The trustees have set a target level of reserves consistent with our ability to protect our future activities from unexpected financial risk as a minimum of three months of expenditure. This equates to approximately £370,000 at 2021 levels.

Due to the Covid-19 situation our free reserves have taken a substantial hit and will continue to be affected into 2022 as the gallery hire business and number of visitors will take a while to come back to 2019 levels. Thereafter we have created a plan to build our reserves back up over a 5-year period, to a level that the trustees believe will secure the future of the Federation.

The Charity’s Assets

Acquisitions and disposals of fixed assets during the period are recorded in the notes to the financial statements.

The Federation of British Artists Limited 17

Report of the Board 31 December 2021

Financial review and policies (continued)

The Board’s Statement of Responsibilities

The Trustees (who are also directors of the Federation of British Artists for the purposes of company law and trustees for the purposes of charity legislation) are responsible for preparing the Report of the Board and 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 charitable company and the group and of the income and expenditure of the group for that period. Under company law the Trustees 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 charitable company, the group and of the income and expenditure of the group for that period.

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 charitable company 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 charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each of the Trustees confirms that:

The Federation of British Artists Limited 18

Report of the Board 31 December 2021 Flnanclal Y9vi￿ and policies Icontinuedl The Board's Statemént of Rèsponsibilities (conlinu&dJ This confirmation is given and should be Inlerpietèd in accordance with the provisions of s418 of the Companies Act 2006. The Trustees are responsible for the Maintenan￿ and integrity of financial infomiation induded on the charitable companys web511e. Legislation in the United Kingdom governing Ihe preparation and dissernination of financial sl8lemenls may drffèr from legislation in other iurisdiclions. Signed on behalf of the board.. Trustee Approved by the board on". jonathan Glasspool Chairman The Federation of British Artists Limited 19

Independent auditor’s report to the Members Year to 31 December 2021

Independent auditor’s report to the members of The Federation of British Artists

Opinion

We have audited the financial statements of The Federation of British Artists (the ‘charitable parent company’) and its subsidiary (the ‘group’) for the year ended 31 December 2021 which comprise the group statement of financial activities, the group and charitable parent company balance sheets, the group statement of cash flows, the principal accounting policies and the notes to the financial statements. 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 group 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 trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group and charitable parent 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 directors with respect to going concern are described in the relevant sections of this report.

The Federation of British Artists Limited 20

Independent auditor’s report to the Members Year to 31 December 2021

Other information

The trustees are responsible for the other information. 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.

In connection with our audit of the financial statements, 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the charitable parent company and its environment obtained in the course of the audit, we have not identified material misstatements in 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:

The Federation of British Artists Limited 21

Independent auditor’s report to the Members Year to 31 December 2021

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, 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 group’s and the charitable parent 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 group or the charitable parent 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

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Independent auditor’s report to the Members Year to 31 December 2021

Auditor’s responsibilities for the audit of the financial statements (continued)

We assessed the susceptibility of the charity’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

The Federation of British Artists Limited 23

Independent auditor’s report to the Members Year to 31 December 2021

Use of this 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.

Catherine Biscoe (Senior Statutory Auditor) For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

Date: 6 September 2022

The Federation of British Artists Limited 24

Consolidated statement of financial activities Year to 31 December 2021

Notes Unrestricted
funds
£		 Restricted
funds
£		 2021
Total
funds
£		 Unrestricted
funds
£
Restricted
funds
£		 2020
Total
funds
£
Income and expenditure
Income from:
Donations and legacies
1
Sponsorship income
2
Investments
3
Charitable activities
4
. Subscriptions
. Exhibitions
. Commissions
. Non Society exhibitions
Other income
5
Total income
Expenditure on:
Raising funds
6
Charitable activities
7
Total expenditure
Net expenditure before
impairment
Impairment
13
Net expenditure and net
movement in funds for the year
9
Reconciliation of funds:
Balances brought forward
at 1 January 2021
Balances carried forward
at 31 December 2021		 3,056
5,000
41

141,266
292,091
493,567
289,249
152,455		 1,550
—
—
—
—
—
—
—		 4,606
5,000
41
141,266
292,091
493,567
289,249
152,455		 8,189
15,200
1,072
165,845
228,230
346,289
114,736
245,214		 1,500
—
—
—
—
—
—
—		 9,689
15,200
1,072
165,845
228,230
346,289
114,736
245,214
1,376,727
4,824
1,465,494		 1,550
—
1,550		 1,378,277
4,824
1,467,044		 1,124,775
4,658
1,458,730		 1,500
—
2,037		 1,126,275
4,658
1,460,767
1,470,318
(93,591)
—		 1,550
—
—		 1,471,868
(93,591)
—		 1,463,388
(338,613)
(126,743)		 2,037

(537)
—		 1,465,425
(339,150)
(126,743)
(93,591)
860,593		 —
25,409		 (93,591)
886,002		 (465,356)
1,325,949
(537)
25,946		 (465,893)
1,351,895
767,002 25,409 792,411 860,593 25,409 886,002

All recognised gains and losses are included in the above consolidated statement of financial activities.

All of the charity’s activities derived from continuing operations during the above two financial periods.

The Federation of British Artists Limited 25

Balance $hetts 31 D8ceth 2021 CwAJat 2020 2021 2020 Flx•d as••ts 13 14 421.333 441.192 421A33 441.192 421.333 441.1¥2 421,335 441.194 15 93.609 66.630 8.487 13.477 565,373 697,323 667A69 777.43) 291.976 270,802 368.174 6fj0.151 475,706 746,508 Uabllllle•: Cr8dilors'. anKJnts 16 r296.3921 1332.6201 1289,07n (301.7021 371M78 444.810 371.074 Total n•1 aM•ts 791411 a86,(￿2 792A09 886,C 17 24409 25,4(￿j 25,409 25,409 . D￿￿drot?d fvnds 18 501.333 265.669 792.411 521.192 501,333 339.401 26S,667 a86.￿ 792,409 521.192 339,399 886,COJ AFproved by the Board s￿ned on its tjehall by.. Tll￿tee ApFThed on: 28 June 2022 Company Registration Number 683275 {ErvJland aTrJ Wales) Jonathan Glasspool Chairman Th8 Fedgratrm of Briti"sh Art￿ts Limited 26

Consolidated statement of cash flows 31 December 2021

Notes
2021
£		 2020
£
Cash flow from operating activities:
Net cash (used in) provided by operating activities
A
Cash outflow from investing activities:
Dividends and interest from investments
Purchase of tangible fixed assets
Proceeds from the disposal of fixed assets
Net cash used in investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at 1 January 2021
B
Cash and cash equivalents at 31 December 2021
B

**(81,536) **		 (282,192)


41
(50,455)
—		 1,072
(25,952)
—
**(50,414) ** (24,880)

(131,950)


697,323
 (307,072)
1,004,395

565,373		 697,323

Notes to the statement of cash flows for the year to 31 December 2021.

A Reconciliation of net movement in funds to net cash provided by operating activities

activities
2021
£		 2020
£
Net movement in funds (as per the statement of financial activities)
Adjustments for:
Depreciation charge
Dividends and interest from investments
(Increase) decrease in stocks
Decrease (increase) in debtors
(Decrease) increase in creditors
Net cash(used in) provided by operating activities		 (93,591)
70,314
(41)
4,990
(26,979)
(36,228)		 (339,150)
74,260
(1,072)
(1,962)
187,498
(201,766)
(81,536) (282,192)

B Analysis of cash and cash equivalents

Analysis of cash and cash equivalents
2021
£		 2020
£
Cash at bank and in hand
Total cash and cash equivalents		 565,373 697,323
565,373 697,323

The Federation of British Artists Limited 27

Principal accounting policies 31 December 2021

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are laid out below.

Basis of preparation

These financial statements have been prepared for the year to 31 December 2021.

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 accounting policies below or the notes to these financial statements.

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 United Kingdom and Republic of Ireland (FRS 102) (Charities SORP FRS 102) issued on 16 July 2014, the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.

The charity constitutes a public benefit entity as defined by FRS 102.

The financial statements are presented in sterling and are rounded to the nearest pound.

Critical accounting estimates and areas of judgement

Preparation of the financial statements requires the trustees and management to make significant judgements and estimates.

The items in the financial statements where these judgements and estimates have been made include:

Assessment of going concern

The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The trustees have made this assessment in respect to a period of one year from the date of approval of these financial statements.

The Federation of British Artists Limited 28

Principal accounting policies 31 December 2021

Assessment of going concern (continued)

Covid-19 has had a noticeable impact on the charity’s finances in the year to 31 December 2021 and this impact along with the cost of living crises are also impacting 2022. The general reserves have taken a substantial hit and will need to be reinstated in the following years. In terms of income, the impact has been felt most keenly through the cancellation and deferment of gallery hires for exhibitions or one off events. During 2021, we have reviewed the Government guidelines and have operated the gallery very mindful of employee and public safety. Expenditure has also been impacted by Covid-19, as activity has been lower, running and exhibition costs have also been lower. The Government job retention scheme has assisted in offsetting costs in relation to furloughed staff and we have also benefitted from Government grants to support local galleries. Rent and rates holidays and other premises costs savings have had a positive impact on running costs.

Free reserves at the 31 December stood at £265,669 (2020 - £339,401). This level of reserves is below the three month requirement stipulated by the trustees of £370,000 based on 2021 accounts. As the free reserves have fallen below this level as a result of the pandemic, the charity plans to build back to a level that the trustees believe will secure the future of the Federation in its 5 year plan. A latest estimate and cash flow has been drawn up for 2022 and 2023 based on a more normal year in 2022, with continued strong sales on-line to support our sales in the gallery. We assume that gallery hirers for exhibitions will come back to close to 2019 levels.

The trustees have reviewed and approved this and concluded, in the light of our current bank balance, that the charity will be able to continue to operate in the exceptional circumstances created post the pandemic. The trustees recognise, however, that if sales are further impacted by the cost of living crises and gallery hires are slow to return, this may result in the charity having to take further action to ensure its ability to continue as a going concern. Having reviewed the available evidence, the trustees have concluded that it is appropriate for the group and charity to continue to prepare its accounts on the going concern basis.

Basis of consolidation

The consolidated statement of financial activities and group balance sheet consolidate the financial statements of the Federation and its subsidiary Mall Galleries Trading Limited made up at the balance sheet date.

No separate statement of financial activities has been presented for the Federation alone as permitted by section 408 of the Companies Act 2006.

Income recognition

Income is recognised in the period in which the charity has entitlement to the income, the amount of income can be measured reliably and it is probable that the income will be received.

Income comprises donations, sponsorship, income from charitable activities and investment income.

The Federation of British Artists Limited 29

Principal accounting policies 31 December 2021

Income recognition (continued)

Income from charitable activities, including subscriptions, exhibitions and commissions, is recognised on a receivable basis. In the event that income is received in advance of the services being provided the income is deferred.

Sponsorship income is recognised on a receivable basis. In the event that income is received in advance of the service being provided the income is deferred.

Donations are recognised when the charity has confirmation of both the amount and settlement date. In the event of donations pledged but not received, the amount is accrued for where the receipt is considered probable. In the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that those conditions will be fulfilled in the reporting period.

Legacies are included in the statement of financial activities when the charity is entitled to the legacy, the executors have established that there are sufficient surplus assets in the estate to pay the legacy, and any conditions attached to the legacy are within the control of the charity.

Dividends are recognised once the dividend has been declared and notification has been received of the dividend due.

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.

Expenditure recognition

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to make a payment 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. Expenditure comprises direct costs and support costs. All expenses, including support costs, are allocated or apportioned to the applicable expenditure headings. The classification between activities is as follows:

All expenditure is stated inclusive of irrecoverable VAT.

The Federation of British Artists Limited 30

Principal accounting policies 31 December 2021

Allocation of support and governance costs

Support costs represent indirect charitable expenditure. In order to carry out the primary purposes of the charity, it is necessary to provide support in the form of personnel development, financial procedures, provision of office services and equipment and a suitable working environment.

Governance costs comprise the costs involving the public accountability of the charity (including audit costs) and costs in respect to its compliance with regulation and good practice.

Support costs, including staff related costs, and governance costs are apportioned based on estimated usage.

Tangible fixed assets

Assets costing more than £250 and with an expected useful life exceeding one year are capitalised.

Stock

Stock is valued at the lower of cost and net realisable value.

Debtors

Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material.

Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition.

Creditors and provisions

Creditors and provisions 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. Creditors and provisions are recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

The Federation of British Artists Limited 31

Principal accounting policies 31 December 2021

Fund accounting

Restricted funds comprise monies raised for, or their use restricted to, a specific purpose, or contributions subject to donor imposed conditions.

Designated funds comprise funds set aside out of unrestricted funds and designated for specific purposes by the Board.

Unrestricted general funds comprise those monies which may be used towards meeting the charitable objectives of the Federation at the discretion of the Board.

Leased assets

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged on a straight-line basis over the lease term.

Pension contributions

The charity operates a defined contribution pension scheme to which all employees are eligible. The pension charge represents payments to the scheme which are charged to the statement of financial activities in the period to which they relate. The charity has no liability beyond making its contributions and paying across the deductions for the employees’ contributions.

The Federation of British Artists Limited 32

Notes to the financial statements Year to 31 December 2021

1 Income from donations and legacies

Unrestricted
funds
£
—
3,056
3,056		 Restricted
funds
£		 2021
Total
funds
£
1,550
3,056
4,606		 Unrestricted
funds
£
—
8,189
8,189		 Restricted
funds
£
1,500
—
1,500		 2020
Total
funds
£
1,500
8,189
9,689
Patrons
Trusts and foundations
Total funds		 1,550
—
1,550

2 Income from sponsorship

Unrestricted
funds
£		 Restricted
funds
£
—
—		 2021
Total
funds
£
5,000
5,000		 Unrestricted
funds
£
15,200
15,200		 Restricted
funds
£		 2020
Total
funds
£
Sponsorship income
Total funds		 5,000 — 15,200
5,000 — 15,200

3 Income from investments

Unrestricted
funds
£		 Restricted
funds
£		 2021
Total
funds
£		 Unrestricted
funds
£		 Restricted
funds
£		 2020
Total
funds
£
Bank interest receivable
Total funds		 41 — 41 1,072 — 1,072
41 — 41 1,072 — 1,072

4 Income from charitable activities

Unrestricted
funds
£		 Restricted
funds
£		 2021
Total
funds
£
89,075
52,191
141,266
292,091
493,567
289,249
1,216,174		 Unrestricted
funds
£		 Restricted
funds
£		 2020
Total
funds
£
Subscriptions
. Members
. Friends and Patrons
Exhibitions
Commissions
Non society exhibitions
Total funds		 89,075
52,191		 —
—		 113,739
52,106		 —
—
113,739

52,106
141,266 — 165,845 —
165,845
292,091
493,567
289,249		 —
—
—		 228,230
346,289
114,736		 —
—
—
228,230

346,289

114,736
1,216,174 — 855,100 —
855,100

The Federation of British Artists Limited 33

Notes to the financial statements Year to 31 December 2021

5 Other income

Other income
Sale of books and
materials
Catering receipts
CJRS grant
Miscellaneous income
Total funds		 Unrestricted
funds
£		 Restricted
Funds
£		 2021
Total
funds
£		 Unrestricted
funds
£		 Restricted
Funds
£		 2020
Total
funds
£
10,886
—
82,206
59,363		 —
—
—
—		 10,886
—
82,206
59,363		 18,703
2,402
147,026
77,083		 —
—
—
—		 18,703
2,402
147,026
77,083
152,455 — 152,455 245,214 — 245,214

6 Expenditure on raising funds

Unrestricted
funds
£		 Restricted
Funds
£		 2021
Total
funds
£		 Unrestricted
funds
£		 Restricted
Funds
£		 2020
Total
funds
£
Cost of raising funds
Total funds		 4,824 — 4,824 4,658 — 4,658
4,824 — 4,824 4,658 — 4,658

7 Expenditure on charitable activities

Unrestricted
funds
£		 Restricted
Funds
£		 2021
Total
funds
£		 Unrestricted
funds
£		 Restricted
Funds
£		 2020
Total
funds
£
Membership costs
Exhibitions by Member
Societies
Commissioned work
Non-Society exhibitions
Education
Total funds		 52,656
459,673
534,711
405,530
12,925		 —
—
—
—
1,550		 52,656
459,673
534,711
405,530
14,475		 36,238
586,336
317,860
473,839
44,457		 —
—
—
—
2,037		 36,238
586,336
317,860
473,839
46,494
1,465,494 1,550 1,467,044 1,458,730 2,037 1,460,767

In 2020 as a result of the Coronavirus pandemic, the ratio of staff time spent across different activities was non-comparable to previous years and therefore the allocation and apportionment of expenditure had been based on the ratio of staff time for 2019. The allocation of expenditure was adjusted in 2021 to reflect the activity and income in 2021.

8 Support costs

Included within expenditure on charitable activities are support costs as detailed below:

Membership
costs
£		 Exhibitions
by
member
societies
£		 Commissioned
work
£		 Non
Society
exhibitions
£		 Education
£		 2021
Total
funds
£
Premises
Depreciation
IT/Software & IT
enhancements
Governance costs
(see below)		 —
703
463
1,125
69,388

18,401
12,115

18,032
117,273

32,288
20,160

26,381		 68,724
18,922
12,458
23,366		 —
—
1,098
—		 255,385
70,314
46,295
68,904
2,291
117,937
196,103		 123,469 1,098 440,898

The Federation of British Artists Limited 34

Notes to the financial statements Year to 31 December 2021

8 Support costs (continued)

Membership
costs
£		 Exhibitions
by
member
societies
£		 Commissioned
work
£		 Non
Society
exhibitions
£		 Education
£		 2020
Total
funds
£
Premises
Depreciation
Governance costs
(see below)		 —
92
3,053
75,113

17,176

9,931
36,541

15,381

10,414		 75,113
18,137
14,791		 16,241
23,474
—
203,008

74,260

38,189
3,145
102,220
62,336		 108,041 39,715
315,457

Support costs have been allocated on the basis of estimated usage by each activity.

Included within support costs are governance costs as detailed below:

2021
Total
funds
£		 2020
Total
funds
£
Auditor’s remuneration
Legal and professional
Other governance costs		 18,375
48,236
2,293		 17,965
17,791
2,433
68,904 38,189

9 Net expenditure for the year

This is stated after charging:

2021
Total
funds
£		 2020
Total
funds
£
Staff costs (note 10)
Auditor’s remuneration (consolidated)
- Audit fees: current year
- Other services: current year
Depreciation of tangible fixed assets
Operatinglease rentals – buildings		 831,509
17,125
1,250
70,314
107,964		 856,713
16,700
2,410
74,260
46,270

During the year the charity received a rent concession from Crown Estate totalling £15,423 (2020: £77,117).

The Federation of British Artists Limited 35

Notes to the financial statements Year to 31 December 2021

10 Staff costs, remuneration of key management personnel and Trustees’ remuneration

2021
£		 2020
£
Staff costs during the year were as follows:
Wages and salaries
Social security costs
Pension costs
Staff costs per function were as follows:
Subscriptions
Exhibitions
Commissions
Gallery & Evening Event hire
Education		 748,458
66,572
16,479		 770,357
69,400
16,956
831,509 856,713
49,714
288,193
247,467
233,209
12,925		 25,708
347,802
207,523
272,229
3,451
831,509 856,713

Staff costs are ordinarily allocated based on staff time spent on different activities and fundraising. In 2020 as a result of the Coronavirus pandemic, the ratio of staff time spent across different activities was non-comparable to previous years and therefore the allocation and apportionment of expenditure had been based on the ratio of staff time for 2019. The allocation of expenditure was adjusted in 2021 to reflect the activity and income in 2021.

The average number of employees, analysed by function, was:

Averageheadcount Averageheadcount Fulltime equivalent Fulltime equivalent
2021 2020 2021 2020
Subscriptions
Exhibitions
Commissions
Gallery & Evening Event hire
Education		 2
11
9
9
0		 1
14
8
10
—		 1.38
7.97
6.85
6.45
0.36		 0.66
8.93
5.33
6.99
0.09
31 33 23.00 22.00

The number of employees who earned £60,000 per annum (including taxable benefits) or more during the year was as follows:

2021 2020
£60,000 - £70,000
£70,000 - £80,000
£80,000 - £90,000		 1
—
1		 —
1
—

£4,080 (2020 - £3,961) pension contributions were made on behalf of these member of staff in 2021.

The key management personnel of the charity in charge of directing and controlling, running and operating the charity on a day-to-day basis comprise the Trustees and the executive team. The total remuneration (including taxable benefits, employer's pension contributions and employer’s national insurance contributions) of the key management personnel for the year was £241,454 (2020 - £242,348).

The Federation of British Artists Limited 36

Notes to the financial statements Year to 31 December 2021

10 Staff costs, remuneration of key management personnel and Trustees’ remuneration (continued)

No Trustee received any remuneration for services as a member of the Board during the period (2020 - £nil). Travel and printing expenses amounting to £nil were reimbursed to no Trustees (2020 - £nil).

11 Net income from Mall Galleries Trading Limited

Mall Galleries Trading Limited is a wholly-owned subsidiary of the Federation which is incorporated in England and Wales. Mall Galleries Trading Limited receives commercial sponsorship on behalf of the Federation. A summary of Mall Galleries Trading Limited’s results for the year to 31 December 2021 are shown below:

Profit and loss account 31
December
2021
£		 31
December
2020
£
Turnover
Cost of sales
Gross profit
Administrative expenses
Net profit
Amount to be distributed to the Federation under Gift Aid
Retained in subsidiary		 83,308
(12,692)		 91,730
(20,286)
70,616
(27,383)		 71,444
(34,458)
43,233
(43,233)		 36,986
(36,986)
— —

The £2 issued share capital equalled the net assets of the company as at 31 December 2021.

12 Taxation

The Federation of British Artists Limited is a registered charity and therefore is not liable to income tax or corporation tax on income derived from its charitable activities, as it falls within the various exemptions available to registered charities.

13 Tangible fixed assets

Tangible fixed assets
Federation and Group
i		 Leasehold
mprovements
£

Furniture
fixtures and
fittings
£		 Office
equipment
£		 Total
£
Cost
At 1 January 2021
Additions
At 31 December 2021
Depreciation
At 1 January 2021
Charge for the year
At 31 December 2021
Net book values
At 31 December 2021
At 31 December 2020		 1,078,308
27,075		 76,003
18,971		 84,477
4,409		 1,238,788
50,455
1,105,383 94,974 88,886 1,289,243
661,139
55,559		 64,721
6,958		 71,736
7,797		 797,596
70,314
716,698 71,679 79,533 867,910
388,686 23,295 9,352 421,333
417,169 11,282 12,741 441,192

The Federation of British Artists Limited 37

Notes to the financial statements Year to 31 December 2021

14 Investments

The investments of the charity consist solely of the charity’s interest in the share capital of Mall Galleries Trading Limited.

15 Debtors

Debtors
Consolidated Federation
2021
£		 2020
£		 2021
£		 2020
£
Trade debtors
Amounts due from subsidiary undertaking
Other debtors
Prepayments and accrued income		 53,543
—
25,000
15,067		 45,360
—
—
21,270		 44,662
207,332
25,000
14,982		 41,173
208,444
—
21,185
93,609 66,630 291,976 270,802

16 Creditors: amounts falling due within one year

Consolidated Consolidated Federation Federation
2021
£		 2020
£		 2021
£		 2020
£
45,633
111,278
82,609
62,179
301,699
Trade creditors
Social security and other taxes
Deposits and fees received in advance
Other creditors and accruals		 62,019
58,347
128,356
47,670		 61,278
119,334
84,609
67,399		 61,564
56,910
128,256
42,345
296,392 332,620 289,075

Included above are deposit fees received in advance as set out below:

Deferred income brought forward
Additional income deferred during the year
Brought forward funds released in the year
Deferred income carried forward at 31 December 2020		 2021
£		 2020
£
84,609
103,056
(59,309)		 177,340
28,134
(120,865)
128,356 84,609

17 Restricted fund

Restricted fund
Federation and Group At 1
January
2021
£		 Income
£		 Expenditure
£		 Transfers
£		 At 31
December
2021
£
Education fund 25,409 1,550 (1,550) — 25,409
25,409 1,550 (1,550) — 25,409
Federation and Group At 1
January
2020
£		 Income
£		 Expenditure
£		 Transfers
£		 At 31
December
2020
£
Education fund 25,946 1,500 (2,037) — 25,409
25,946 1,500 (2,037) — 25,409

The Federation of British Artists Limited 38

Notes to the financial statements Year to 31 December 2021

17 Restricted fund (continued)

The Education fund comprises donations received for the learning project entitled ‘In the Studio’.

18 Designated funds

Designated funds
Federationand Group At 1
January
2021
£		 New
Designations
£
—
50,455
50,455		 Utilised/
Released
£		 At 31
December
2021
£
Premises maintenance fund
Tangible fixed assets fund		 80,000
441,192		 —
(70,314)		 80,000
421,333
521,192 (70,314) 501,333
Federationand Group At 1
January
2020
£		 New
Designations
£
—
25,952
25,952		 Utilised/
Released
£		 At 31
December
2020
£
Premises maintenance fund
Tangible fixed assets fund		 80,000
616,243		 —
(201,003)		 80,000
441,192
696,243 (201,003) 521,192

The premises maintenance fund is designated to provide monies for the external painting of the galleries as required at regular intervals by the terms of the lease.

The tangible fixed assets fund represents the net book value of the charity’s tangible fixed assets. The fund recognises the fact that the tangible fixed assets are required for the dayto-day operation of the charity and are not available for other purposes or general reserves.

19 Analysis of net assets between funds

Group General
Fund
£		 Designated
Funds
£		 Restricted
Funds
£		 Total
2021
£
Fund balances at 31 December 2021
are represented by:
Fixed assets
Current assets
Creditors: amounts falling due
within one year
Total net assets		 —
562,060
(296,392)		 421,333
80,000
—		 —
25,409
—		 421,333
667,469
(296,392)
265,669 501,333 25,409 792,411
Group General
Fund
£		 Designated
Funds
£		 Restricted
Funds
£		 Total
2020
£
Fund balances at 31 December 2020
are represented by:
Fixed assets
Current assets
Creditors: amounts falling due
within one year
Total net assets		 —
672,021
(332,620)		 441,192
80,000
—		 —
25,409
—		 441,192
777,430
(332,620)
339,401 521,192 25,409 886,002

The Federation of British Artists Limited 39

Notes to the financial statements Year to 31 December 2021

19 Analysis of net assets between funds (continued)

Federation General
Fund
£		 Designated
Funds
£		 Restricted
Funds
£		 Total
2021
£
Fund balances at 31 December 2021
are represented by:
Fixed assets
Current assets
Creditors: amounts falling due
within one year
Total net assets		 2
554,742
(289,077)		 421,333
80,000
—		 —
25,409
—		 421,335
660,151
(289,077)
265,667 501,333 25,409 792,409
Federation General
Fund
£		 Designated
Funds
£		 Restricted
Funds
£		 Total
2020
£
Fund balances at 31 December 2020
are represented by:
Fixed assets
Current assets
Creditors: amounts falling due
within one year
Total net assets		 2
641,099
(301,702)		 441,192
80,000
—		 —
25,409
—		 441,194
746,508
(301,702)
339,399 521,192 25,409 886,000

20 Leasing commitments

At 31 December 2021 the Federation had future minimum commitments under operating leases on land and buildings as follows:

leases on land and buildings as follows:
Paymentswhich falldue: 2021
£
123,387
493,548
472,983
1,089,918		 2020
£
Within one year
Within two to five years
After five years		 123,387
493,548
596,370
1,213,305

21 Capital commitments

At 31 December 2021, the charity had capital commitments of £nil (2020 - £nil).

22 Liability of members

The Federation is constituted as a company limited by guarantee. In the event of the Federation being wound up, members are required to contribute an amount not exceeding £1.

The Federation of British Artists Limited 40

Notes to the financial statements Year to 31 December 2021

23 Related party transactions

The charity received commission and Trustees hire fees totalling £17,545 (2020 - £21,323) from members of the Board of Trustees in respect of the sale of paintings through exhibitions by societies of which they are members, or commissioned paintings or gallery hire. At 31 December 2021, an amount of £nil (2020 - £nil) was due from members of the Board of Trustees in respect of these activities. Commissions and gallery hire fees received by the charity were at the standard rates payable by all artists.

No donations were received from Trustees in 2021 or 2020.

Other than the transactions above there were no other related party transactions during the year.

Connected Charities

The Federation acts on behalf of nine Member Societies, of which eight are registered as charities. The details of these are given below.

Charity
Charity **Reg No. ** Charitable objectives
Royal Institute of Painters in Water Colours 291405 The promotion of Fine Arts and in
particular the art of painting in water
colours.
Royal Society of British Artists 294590 To promote, maintain, improve and
advance public education by the
encouragement of the Arts.
Royal Society of Marine Artists 289944 To promote, maintain, improve and
advance the education of the public by
the encouragement of the study and
practice of the Fine and Applied Arts
with particular but not exclusive
reference to the sea and maritime
subjects.
Royal Society of Portrait Painters 327460 To promote, maintain, improve and
advance education in the Fine Arts and
in particular to encourage the
appreciation, study and practice of the
art of portraiture.
Royal Institute of Oil Painters 327615 The encouragement and development
of oil painting by holding open
exhibitions of work.
New English Art Club 295780 To advance the education of the public
in the art of painting and the Fine Arts.
Pastel Society 296479 The promotion of Fine Arts and in
particular the art of the pastel and
pencil.
Society of Wildlife Artists 328717 To foster and encourage all forms of
visual art based on or representing
wildlife.

The principal contact address for all connected charities is 17 Carlton House Terrace, London SW1Y 5BD.

The Federation of British Artists Limited 41