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2023-12-31-accounts

Charity No. 258348 (England and Wales)

Royal Watercolour Society

Trustees’ report and financial statements for the year ended 31 December 2023

Royal Watercolour Society

Contents

Page
Reference and administrative details 3
Report of the Council 4
Independent examiner’s report 12
Statement of financial activities 14
Balance sheet 15
Notes to the financial statements 16

Page 2

Royal Watercolour Society

Reference and administrative details For the year ended 31 December 2023

Registered charity number 258348
Charity name Royal Watercolour Society is the working name of the
registered charity Royal Society of Painters in Water Colours
Council Until 23 April 2023:
Jill Leman (President)
Mark Raggett (Senior Vice President)
Jim Hunter (Junior Vice President)
James Faure Walker (Hon Curator)
Liz Butler (until 23 April 2023)
John Crossley
John Duffin
Chloe Fremantle
David Hamilton
Jane Lewis
Paul Regan
Lisa Traxler
From 23 April 2023 and to the date of signing
Charles Williams (President)
Jim Hunter (Senior Vice President)
John Crossley (Junior Vice President)
Martin Jacobs (Hon. Treasurer)
Rika Newcombe (Hon. Curator)
James Faure Walker
Lottie Cole
John Duffin
Chloe Fremantle
Jill Leman
Anne Lynch
Julia Midgeley
Olivia O’Sullivan
David Wiseman
Administrative office Bankside Gallery
48 Hopton Street
Blackfriars
London
SE1 9JH
Bankers National Westminster Bank Plc
91 Westminster Bridge Road
London
SE1 7HW

Page 3

Royal Watercolour Society

Reference and administrative details For the year ended 31 December 2023

Investment advisers Cazenove Capital Management Limited
12 Moorgate
London
EC2R 6DA
Independent examiner Cara Turtington FCA DChA
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE

Page 4

Report of the members of the Council For the year ended 31 December 2023

Royal Watercolour Society

Introduction

The Council is pleased to present the annual report and financial statements of the Royal Watercolour Society for the year ended 31 December 2023. The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with its own Laws and Regulations, 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.

Structure, governance and management

Governing document and legal status

The Royal Watercolour Society was founded in 1804 and received its Royal Patronage in 1881. The Society has administered its affairs and exhibited as an independent body since its foundation. The Society is an unincorporated association, governed by an internally approved set of Laws. The Society is a registered charity No. 258348.

Related parties

The Royal Watercolour Society and The Royal Society of Painter-Printmakers are jointly and equally owners of Bankside Gallery, a company limited by guarantee and a registered charity. The Royal Watercolour Society works regularly in partnership with The Royal Society of Painter-Printmakers and Bankside Gallery to pursue its charitable purposes, and shares some common Council/Board members.

Organisational structure

The governance and strategic planning of the Society are carried out by a Council of Members (acting as trustees of the charity) that meets quarterly. The Council comprises the officers of the Society elected by ballot, together with eight Members who serve for three years. The President is also a custodian Trustee. The officers of the Society comprise the President, two Vice Presidents, and a Treasurer who provides financial reports to Council.

An Exhibitions Committee is responsible for considering Society exhibitions. The Director of Bankside Gallery is charged with finding suitable artists or organisations to hire the Gallery for exhibitions when it is not being used for shows by Members of the two Royal Societies. To ensure the requisite standard of work, all external proposals are reviewed by the two Society Presidents.

Recruitment and appointment of Council members

Council members are elected to carry out defined roles; in addition to the usual officer duties, these are Exhibitions and Membership,. Appointments are for a term of three years, with the possibility of reappointment.

Members of the Council are elected at an Annual General Meeting. A limited number of new members may be co-opted by the President.

Investment powers and management

All funds requiring investment are, in the absence of any special direction by a General Meeting of the Society, applied or invested by the Council, who have authority to effect transactions of stocks and shares held by them for the Society.

Funds are managed, on behalf of the Council, by Cazenove Capital Management Limited.

Page 5

Royal Watercolour Society

Report of the members of Council (continued) For the year ended 31 December 2023

Risk assessment

Council reviews annually the major risks to which the charity is exposed, and takes action as appropriate to manage and mitigate those risks.

The principal risk faced by the Society is its limited sources of income which, in recent years, have been insufficient to cover the cost of its activities. Council is working to reduce this risk by implementing tighter controls over expenditure and by seeking ways to increase the Society’s income in the future.

The RWS owns a long term lease for a gallery in Whitcomb Street near Trafalgar Square (The Whitcomb Street Gallery). The Society has a vision and plan to develop this gallery. Fundraising has been undertaken in order to support the fitting out. It is intended that the gallery space will be used for a number of purposes in line with the objectives of the Society. In order to progress with this opportunity the gallery space is being promoted for short term commercial hire. Such activity brings opportunity but also a range of associated risks to the RWS for which the Council is seeking to manage and mitigate as appropriate.

The Society is also vulnerable to the high cost of exhibitions, and to the susceptibility of painting sales to economic conditions and increasing competition for sales of artworks. Council mitigates these risks through careful planning of its exhibitions, and through working closely with Bankside Gallery in the promotion of its exhibitions to the public.

The In the Society also continues to work closely with Bankside Gallery staff in the relevant areas.

Reserves policy

Council has reviewed the Society’s need for reserves in line with the guidance issued by the Charity Commission. Council currently recognises the need to set aside amounts to ensure the continuance of the following activities, for a minimum period of two years. Until such time as the Society is able to regularly cover its costs, calls are made on the Society’s funds for:

At 31 December 2023, the Society held total reserves of £1,073,221 (2022: £1,114,451), comprising unrestricted reserves of £882,973 (2022: £902,882) restricted reserves of £158,125 (2022: £178,315) and an expendable endowment of £32,123 (2022: £33,254). Council is of the opinion that, in light of its future plans to mitigate the risks faced by the Society, the reserves held at the end of the year were sufficient to enable the Society to work successfully towards fulfilling its aims and objectives.

Restricted Funds comprise the Peter de Wint Capital Fund, the Peter de Wint General Fund and the Whitcomb Street Fund. The Peter de Wint funds are held for long-term use in accordance with the donor's intentions. The Whitcomb Street Fund is for the development of the new gallery space. During the year a transfer out of the restricted fund took place in relation to capital works to improve the gallery building. This has been capitalised as a tangible fixed asset held in in a designated fund and will be depreciated over the life of the lease or the expected life of the assets if shorter. In addition, significant expenditure has been incurred by this fund as the Gallery is developed.

Page 6

Royal Watercolour Society

Report of the members of Council (continued) For the year ended 31 December 2023

Reserves policy (continued)

Designated Funds fall into two broad categories; firstly, funds set aside by Council to absorb future depreciation costs of recent capital projects - the balances on these funds will reduce though annual depreciation charges in accordance with the depreciation policy set out in Note 1.4 until such time as the related assets have been fully written down; secondly, funds donated to the Society or set aside by Council either to be used for a particular purpose, or to record funds used and remaining in respect of a particular legacy or donation - the balances on these funds will be used up over varying timescales as projects or needs dictate.

During the year the continued leasehold improvement works on the Whitcomb Street property were capitalised as a tangible fixed asset and are held in a designated fund.

Summaries of movements in all funds during the year, together with a detailed description of the purposes for which the various funds may be used, are contained in the notes to the accounts.

Accounting records

The preparation of the Society’s accounting records is outsourced to a bookkeeper who is suitably qualified for the task. Internal controls, appropriate for a charity of this size, have been put in place to protect the Society’s funds and to ensure their proper application.

Objectives and activities

Objectives

The main objectives of the Society are the advancement of education and the improvement of public taste in art by means of the encouragement of watercolour painting.

Activities

The Royal Watercolour Society aims to achieve its objectives through the following activities:

Public benefit

Council has paid due regard to the Charity Commission’s guidance on public benefit in deciding what activities the charity should undertake. The Royal Watercolour Society recognises and welcomes the need to carry out its charitable activities for the benefit of the general public, and retains this aim at the centre of its strategic planning. The Society continues to offer free admission to all of its exhibitions and is working

Page 7

Royal Watercolour Society

Report of the members of Council (continued) For the year ended 31 December 2023

to increase the amount and breadth of education work it carries out in the local community and beyond, seeking to involve people from the widest possible range of backgrounds and abilities.

Achievements and performance

The Royal Watercolour Society has worked hard to develop a programme of exhibitions, talks and events in support of its charitable aims and objectives. At a time when public funding of the Arts has been squeezed by other pressing concerns, the Society has stood firm and strengthened its efforts in the important task of promotion of the Arts, and the Visual Arts and works on paper in particular.

Council seeks to preserve the Society's nationally important historic legacy in the form of its Archive and Diploma collection, as well as being a significant cultural voice speaking on behalf of the Visual Arts and of the UK's tradition of works on paper and that of watercolour in particular, for which the Society is internationally recognised. Council continues to challenge itself to be bold in its mission to promote its artistic and charitable aims through exhibitions and educational outreach.

Achievements against objectives

The Royal Watercolour Society set out, at the start of 2023, to carry out the following activities:

Financial review

Sources of funding and financial position

The Royal Watercolour Society funds its activities and administrative costs through membership subscriptions, grants, donations, bequests, income from exhibitions and education events, royalties from publications, and investment income and gains generated on its invested funds. The Whitcomb Street Gallery also offers a potential source of income for the Society and a plan is being put together to exploit this opportunity.

The financial position of the Charity is set out in the Statement of Financial Activities on page 12 and the Balance sheet on page 13.

Page 8

Royal Watercolour Society

Report of the members of Council (continued) For the year ended 31 December 2023

During the year under review, total income amounted to £187,925 (2022: £413,009).

The cost of raising funds in the year was £10,544 (2022: £14,081), the total costs of charitable activities was £256,893 (2022: £164,510), of which support costs and governance costs (see note 3) amounted to £100,667 (2022: £35,448) and £4,940 (2022: £7,136) respectively.

Before investment movements, the Society made a net loss from activities of £79,521 (2022: net surplus £234,418). After investment gains of £38,291 (2022: losses £94,036), the Society’s Total Funds showed net loss for the year of £41,231 (2022: net surplus: £140,382).

Investment performance

Investments are held in intermediate risk funds which provide opportunities for a good income return and also some growth of capital in real terms.

The coronavirus pandemic and the associated market volatility has had an impact on investment performance.

Fund transfers

As described in note 12, a net transfer from restricted funds to a designated fixed asset fund of £Nil (2022: £20,848) has been made during the year. This relates to capital works on Whitcomb Street and associated equipment. The funds for this project were raised in the Whitcomb Street Restricted Fund. The capital works have been capitalised as an unrestricted tangible fixed asset held in a designated fund.

Plans for future periods

During 2024 and 2025, the Society plans to carry out the following activities:

Impact of the coronavirus pandemic

The Council has reviewed the impact of the pandemic on the Society as restrictions have been lifted globally. There has been a lasting effect on the RWS and the art world which has resulted in more online exhibitions and events.

Page 9

Royal Watercolour Society

Report of the members of Council (continued) For the year ended 31 December 2023

Council’s responsibilities in relation to the financial statements

The charity’s trustees are responsible for preparing a trustees’ annual report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England and Wales requires the charity’s trustees to prepare financial statements for each 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, of the charity for that period. In preparing the financial statements, the trustees are required to:

The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the financial statements comply with the Charities Act 2011, the applicable Charities (Accounts and Reports) Regulations, and the provisions of the Trust deed. They are also responsible for safeguarding the assets of the charity and 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 in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements.

By Order of the Council

Charles Williams President

28 April 2024

Page 10

Royal Watercolour Society

Independent Examiner’s report to the trustees of the Royal Watercolour Society For the year ended 31 December 2023

I report to the trustees on my examination of the accounts of the Royal Watercolour Society (the Charity) for the year ended 31 December 2023.

Respective Responsibilities of trustees and examiner

As the trustees of the Charity you are responsible for the preparation of the accounts in accordance with the requirements of the Charities Act 2011 (‘the Act’).

I report in respect of my examination of the Charity’s accounts carried out under section 145 of the 2011 Act and in carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the Act.

Basis of independent examiner’s report

My examination was carried out in accordance with the general Directions given by the Charity Commission. An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts, and seeking explanations from you as trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit and consequently no opinion is given as to whether the accounts present a ‘true and fair view’ and the report is limited to those matters set out in the statement below.

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

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

  1. accounting records were not kept in respect of the Charity as required by section 130 of the Act; or

  2. the accounts do not accord with those records; or

  3. the accounts do not comply with the applicable requirements concerning the form and content of accounts set out in the Charities (Accounts and Reports) Regulations 2008 other than any requirement that the accounts give a ‘true and fair view which is not a matter considered as part of an independent examination.

I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.

Cara Turtington FCA DChA 2024 14 May 2024 For and on behalf of Saffery LLP 71 Queen Victoria Street Chartered Accountants London EC4V 4BE

Page 11

Royal Watercolour Society

Statement of Financial Activities For the year ended 31 December 2023

Unrestricted
Designated
General
Funds
Funds
Note
£
£
Income and endowments
from:
Donations and legacies
2
37,727
-
Charitable activities
2
126,034
-
Investments
21,902
-
Total
185,663
-
Expenditure on:
Raising funds
3,972
5,526
Charitable activities
211,093
17,668
Total
3
215,065
23,194
Net income/(expenditure)
before (losses)/gains on
investments
(29,402)
(23,194)
Net (losses) / gains on
investments
3,356
29,330
Net income/(expenditure)
for the year
(26,046)
6,136
Transfers between funds
12
9,544
(9,544)
Net movement in funds
(16,502)
(3,408)
Reconciliation of funds
Total funds brought forward
162,580
740,302
Total funds carried forward
146,078
736,895		 Restricted
Expendable
Funds
Endowment
Funds
£
£
-
-
-
-
2,262
-
2,262
-
854
202
26,132
2,000
26,986
2,202
(24,724)
(2,202)
4,534
1,071
(20,190)
(1,131)
-
-
(20,190)
(1,131)
178,315
33,254
158,125
32,123		 Total
Funds
2023
£
37,727
126,034
24,164
187,925
10,554
256,893
267,447
(79,522)
38,291
(41,231)
-
(41,231)
1,114,451
1,073,221		 Total
Funds
2022
£
293,500
104,715
14,794
413,009
14,081
164,510
178,591
234,418
(94,036)
140,382
-
140,381
974,070
1,114,451

The Statement of Financial Activities includes all gains and losses in the year.

All of the above amounts relate to continuing activities.

The notes on pages 14 to 28 form part of these financial statements.

Page 12

Royal Watercolour Society

Balance sheet As at 31 December 2023

Unrestricted
Note
£
Fixed assets
Tangible assets
Investments
5
6
247,035
1,062,948
1,309,983
Current assets
Debtors
Cash at bank and in
hand
8
2,421
19,389
21,810
Creditors: amounts
falling due within
one year
9
(105,609)
Net current (liabilities)/
assets
(83,799)
Creditors: amounts due
after more than one
year
10
(343,211)
Net assets
882,973
Charitable funds
Unrestricted income
funds
Restricted income funds
Expendable endowment
12
882,973
13
14
-
-
Total funds
882,973		 Restricted

£
-
147,854
147,854
-
10,271
10,271
-
10,271
-
158,125
-
158,125
158,125		 Expendable
Endowment
£
-
32,095
32,095
-
28
28
-
28
-
32,123
-
-
32,123
32,123		 2023
Total
£
247,035
1,242,897
1,489,932
2,421
29,688
32,109
(105,609)
(73,500)
(343,211)
1,073,221
882,973
158,125
32,123
1,073,221		 2022
Total
£
260,524
1,059,818
1,320,342
282,887
6,102
288,988
(84,702)
204,287
(410,179)
1,114,451
902,882
178,315
33,254
1,114,451

The notes on pages 14 to 28 form part of these financial statements.

These financial statements were approved and signed by a member of the Council and authorised for issue on 28 April 2024.

Charles Williams Trustee Charity No. 258348

Page 13

Royal Watercolour Society

Notes to the financial statements For the year ended 31 December 2023

1. Accounting policies

1.1 Basis of accounting

The accounts have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the notes to these accounts. The financial statements have been prepared in accordance with the second edition of the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), and the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011.

The accounts (financial statements) have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view’. This departure has involved following Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

Advantage has been taken of the exemption for charities with income less than £500,000 from preparing a cash flow statement.

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

Council is of the opinion that there are no material uncertainties about the charity’s ability to continue as a going concern. The Council has considered the impact of the coronavirus pandemic and do not believe this has an impact on the going concern status of the charity.

1.2 Income

All income is recognised once the charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.

Donations are recognised when the charity has been notified in writing of both the amount and settlement date. 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.

Membership income is treated as a donation as the benefits of membership are not of significant monetary value and the fee paid is therefore treated as a donation to the charity’s general funds.

Page 14

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

1. Accounting policies

(continued)

1.3

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that settlement will be required and the amount of the obligation can be measured reliably.

Expenditure is recognised on an accruals basis. All expenses including support costs and governance costs are allocated or apportioned to the applicable expenditure headings. Costs in respect of future events or exhibitions are charged when the relevant events or exhibitions take place.

Support costs have been allocated between support costs and governance costs. Governance costs comprise all costs involving the public accountability of the charity and its compliance with regulation and good practice. All support costs are allocated to charitable and fundraising activities on the basis of time spent.

1.4 Tangible fixed assets and depreciation

Expenditure on improvements, furniture and equipment that exceeds £1,000 is capitalised. Fixed assets are stated at cost less accumulated depreciation. Provision for depreciation of fixed assets held for use by the charity is made at annual rates calculated to spread the cost of each asset over its expected useful life. The depreciation rates currently in use are:

Leasehold property and improvements - Evenly over the remainder of the lease
Gallery development Whitcomb Street - Evenly over 20 years
Plant and security - straight line over 3 years
Furniture and equipment - straight line over 5 years

Assets are not depreciated until they are brough fully into use by the charity.

1.5 Investments

Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year.

1.6 Historic assets

The Society’s Historic Assets (note 5) are not capitalised as the Members of Council consider that the cost of obtaining valuations would outweigh the benefit to users of the financial statements.

1.7 Taxation

No tax provision is included in the financial statements on the basis that all income for the registered charity is derived from wholly charitable activities.

1.8

Fund accounting

The charity has restricted funds, where the donor has specified that they can only be used on specific projects in the future. All other funds are unrestricted.

Page 15

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

1. Accounting policies

(continued)

Fund Accounting (continued)

Where funds are received via gift or legacy to support the longer term work of the charity these will be treated as an endowment. An endowment will be classed as permanent when the donor specifies that the capital must be maintained in perpetuity and as expendable in all other circumstances.

Designated funds have been nominated by the Council to represent their intentions to fund future projects or to reflect a wish of donors that was not legally binding at the time a gift was made. These funds can be undesignated and applied to any of the charitable activities in the future at the Council’s absolute discretion.

2.

a.

Analysis of income Donations and legacies

Membership income
Grants and donations
Legacies received
Election fees		 General
Designated
Funds
Funds
£
£
27,273
-
4,153
-
4,262
-
2,040
-
37,728
-		 Restricted
Expendable
Funds
Endowment
£
£
-
-
-
-
-
-
-
-
-
-		 2023
Total
£
27,273
4,153
4,262
2,040

37,728		 2022
Total
£
24,415
325
267,000
1,760
293,500

Donations and legacies

Membership income
Grants and donations
Legacies received
Election fees		 General
Designated
Funds
Funds
£
£
24,415
-
325
-
-
267,000
1,760
-
26,500
267,000		 Restricted
Expendable
Funds
Endowment
£
£
-
-
-
-
-
-
-
-
-
-		 2022
Total
£
24,415
325
267,000
1,760
293,500

b.

Charitable activities

Lease and service charge income
Gallery hire and events		 2023
£
81,378
44,656
126,034		 2022
£
76,954
27,761
104,715

Page 16

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

3.
Expenditure
2023
Direct
Support
Governance
costs
costs
costs
£
£
£
Raising funds
10,554
-
-
Charitable activities:
Running the RWS
19,299
100,667
4,940
Support of Bankside Gallery
23,850
-
-
Whitcomb St development
34,571
73,566
-
Total charitable activities
77,720
174,233
4,940
Total expenditure
88,274
174,232
4,940
2022
Direct
Support
Governance
costs
costs
costs
£
£
£
Raising funds
14,081
-
-
Charitable activities:
Running the RWS
23,850
35,448
7,136
Support of Bankside Gallery
23,850
-
-
Whitcomb St development
74,225
-
-
Total charitable activities
121,925
35,448
7,136
Total expenditure
136,006
35,448
7,136
Net income/(expenditure) is stated after charging:
Depreciation
Examiner’s remuneration:
- independent examination (Saffery LLP)
- preparation of accounts and advice (Saffery LLP)		 2023
Total
£
10,554
124,906
23,850
108,137
256,893
267,447
2022
Total
£
14,081
66,434
23,850
74,225
164,510
178,591
2023
£
16,563
1,700
10,080		 2022
Total
£
14,081
66,434
23,850
74,225
164,510
178,591
2022
£
4,110
1,649
3,900

Page 17

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

4. Staff costs

Included within direct costs of charitable activities are staff costs of:

taff costs
cluded within direct costs of charitable activities are staff costs of:
Wages and salaries
National insurance
Pensions		 2023
£
59,863
-
422
60,285		 2022
£
34,697
(776)
-
33,921

The average number of employees during the period was 2.

No employee earned over £60,000 in the current or preceding period.

5. Tangible fixed assets

Cost
At 1 January 2023
Additions
At 31 December 2023
Depreciation
At 1 January 2023
Charge for the year
At 31 December 2023
Net book value
At 31 December 2023
At 1 January 2023		 Equipment
£
10,945
1,187
12,132
1,779
2,441
4,220
7,912
9,166		 Leasehold
Gallery
property improvements
£
£
150,345
180,648
-
1,886
150,345
182,534
79,634
-
3,438
10,684
83,072
10,684
67,273
171,850
70,711
180,648		 Leasehold
Gallery
property improvements
£
£
150,345
180,648
-
1,886
150,345
182,534
79,634
-
3,438
10,684
83,072
10,684
67,273
171,850
70,711
180,648		 Total
£
341,938
3,073
345,011
81,413
16,563
10,684 97,976
171,850
180,648		 247,035
260,525

The leasehold property relates to the Gallery and Office premises at 48 Hopton Street, which is owned on a 60-year lease from the Corporation of London Borough of Southwark that expires on 27 August 2044. The lease was professionally valued in 2005, by Drivers Jonas, at £425,000.

Gallery improvement additions relate to capital works under construction on the Whitcomb Street property. Depreciation commenced in 2023, following the gallery space being brought fully into use.

Page 18

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

5. Fixed assets (continued) Historic Assets

The Society’s Historic Assets are insured for the sum of £2.5m and comprise the following:

i) Diploma Collection:

The Diploma Collection comprises paintings acquired from Members on their election to the Society; ownership of these is inalienable as the Society's Laws do not permit their disposal.

ii) Other Works of Art:

Through bequests, the Society has acquired some other works which are mainly held for historical, educational and artistic reasons.

6. Investments

Market value
At 1 January 2022
Contribution of funds
Funds withdrawn
Income less fees
Realised and unrealised
(losses) / gains
Investment cash held on
deposit
At 31 December 2022		 2023
£
1,059,818
271,151
(227,934)
16,460
38,291
85,111
1,242,897		 2022
£
1,245,598
-
(85,850)
(5,893)
(94,037)
-
1,059,818

At 31 December 2023, 34% of investments were held in UK Equity and Bond funds (2022: 19%), 38% in Equity and Bond funds outside the UK (2022: 51%), 19% in Hedge and Alternative Funds (2022: 19%), and the remaining 9% in cash (2022: 11%).

No investments were considered to be material in the context of the market value of the portfolio.

7. Council expenses

No Council member received any emolument or payment for professional or other services during the year, but one Council members (2022: one) received reimbursement of £167 (2022: £216) for travel, subsistence and telephone expenses incurred during the course of carrying out their duties as charity trustees.

Page 19

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

8.
Debtors
Trade debtors
Other debtors
Amount due from Bankside Gallery
Prepayments
9.
Creditors
Amounts falling due within one year
Trade creditors
Amount due to Bankside Gallery
Sundry creditors and accruals
Deferred income
10.
Creditors
Amounts falling due after more than one year

Deferred income due after more than one year
Deferred Income
Balance brought forward
Income deferred to the following year
Deferred income released during the year
Balance carried forward
The deferred income is expected to be recognised as follows
Within 1 year
Within 1 to 2 years
Within 2 to 5 years
After more than 5 years		 2023
£
314
-
2,107
2,421
2023
£
3,348
80
26,739
75,442
105,609
2023
£
343,211
478,647
7,873
(68,468)
418,052
66,968
66,968
200,904
83,212
418,052		 2022
£
71
267,000
-
15,816
282,887
2022
£
4,682
-
11,552
68,468
84,702
2022
£
410,179
544,115
1,500
(66,968)
478,647
67,968
66,968
200,904
142,807
478,647

Page 20

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

Deferred income relates to rental income received in advance. Rental income was received for a period of 10 years in advance for the Whitcomb Street property, with the lease commencing on 13 February 2020.

11. Contingent Liabilities

The Society is party to an indemnity, jointly with the Royal Society of Painter-Printmakers, to provide Bankside Gallery Limited with continuing financial support and assistance as may be agreed with the company for periods of two years at a time, and to make good any shortfall in the company’s annual budget over the same period.

No liability under the indemnity arose for the year ended 31 December 2023 and, based on the financial statements and budgets of Bankside Gallery Limited, Council is of the opinion that it is unlikely that any substantial liability will arise from the indemnity within two years.

12. Financial commitments

In February 2020 the charity signed a lease for a property on Whitcomb Street. The lease has a length of 250 years. The annual commitment is a peppercorn rent. This constitutes a long-term commitment for the charity.

Page 21

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

13.
At 1 January
2023
Income from
donations and
charitable
activities
Investment
income
Expenditure on
charitable
activities
Transfers
between fund
Investment
gains
At
31
December
2023		 Unrestricted funds
President’
s Fund
David
Gluck
Fund
Elizabeth
Scott
Moore
Fund
Mezzanine
Dep’n Fund
Diploma
Room Dep’n
Fund
Whitcomb
Street
Refurbishment
Fund
Whitcomb
Street Rent
in Advance
Fund
Joan
Williams
Memorial
Fund
Arthur Wise
Whitcomb
Street
Fund
Total
Designated
Funds
General
Funds
Total
unrestricted
funds
£
£
£
£
£
£
£
£
£
£
647
95,135
10,935
25,358
25,530
189,814
-
267,000
125,884
740,302
162,579
902,882
-
-
-
-
-
-
-
-
-
-
163,761
163,761
-
-
-
-
-
-
-
-
-
-
21,902
21,902
-
(1,578)
(66)
(1,154)
(1,283)
(14,231)
(2,496)
(1,621)
(764)
(23,194)
(215,065)
(238,259)
-
-
-
-
-
1,210
(10,754)
(9,544)
9,544
0
-
3,066
352
-
-
-
13,250
8,605
4,057
29,330
3,356
32,686
647
96,623
11,221
24,204
24,247
176,794
-
273,984
129,177
736,896
146,077
882,973

Page 22

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

Unrestricted Funds (2022 comparative)

At 1 January
2022
Income from
donations and
charitable
activities
Investment
income
Expenditure on
charitable
activities
Transfers
between fund
Investment
gains
At 31 December
2022		 President’
s Fund
David
Gluck
Fund
Elizabeth
Scott
Moore
Fund
Collections
Designated
Fund
Mezzanine
Dep’n Fund
Diploma
Room Dep’n
Fund
Whitcomb
Street
Refurbishment
Fund
Arthur Wise
Whitcomb
Street
Fund
Total
Designated
Funds
General
Funds
Total
unrestricted
funds
£
£
£
£
£
£
£
£
£
647
105,923
12,049
26,512
26,813
169,639
-
138,701
480,283
198,884
679,168
267,000
267,000
131,215
398,215
-
13,601
13,601
(2,193)
(136)
(1,154)
(1.283)
(673)
(1,562)
(7,001)
(123,551)
(130,552)
20,848
20,848
-
20,848
(8,595)
(978)
(11,255)
(20,828)
(57,541)
(78.369)
647
95,135
10,935
25,358
25,530
189,814
267,000
125,884
740,302
162,608
902,910

Page 23

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

12. Unrestricted funds

(continued)

The income and capital bequests received from Mrs Elizabeth Scott Moore, Mr David Gluck and the JE Eddison Trust may be used at the discretion of the Council in accordance with its Reserves Policy as set out in the Report of the Council that introduces these financial statements.

The Elizabeth Scott Moore Fund no longer has a deficit balance but continues to be monitored by Members of Council.

The David Gluck Fund is invested in the Society’s General Fund portfolio and not held in a separate and distinct investment portfolio or bank account; investment income is not currently reallocated from the General Fund to the David Gluck Fund.

The President’s Fund is designated to be used at the discretion of the President.

The purpose of the Collections Designated Fund varies over time, depending on the Council’s priorities. All unrestricted income raised for the purpose of maintaining the Society’s collections, together with all related expenditure, is recorded in the Fund in order that an overview of activities in this area can be clearly seen. However, from time to time, Council agrees that certain elements of this expenditure may be financed from other funds, such as the General Fund, or the David Gluck Fund – in these cases, appropriate transfers are made from those funds to provide the agreed subsidy.

The Diploma Room Depreciation Fund was established to record funds used to build the Diploma Collection Storage Room at Bankside Gallery, and depreciation charged in respect of this work. The room is used for the unrestricted purpose of education and learning about the Society’s Collections.

The Mezzanine Depreciation Fund was established to record funds used to build the mezzanine floor in the archive room at Bankside Gallery, and depreciation charged in respect of this work.

The Arthur Wise Whitcomb Street Fund was established using part of a legacy received from the estate of Arthur Wise in 2017 and 2018. It is to be used on the future expenses for the Whitcomb Street Gallery

The Whitcomb Street Asset Fund relates to capital improvements at the Whitcomb Street property. These will be depreciated over the lift of the lease.

The Joan Williams Memorial Fund was left to the Society by former member Joan Williams. The funds are unrestricted but has been designated as the Council intend to hold an exhibition or regular exhibition for young artists at the Whitcomb Street Gallery. However, the funds could be applied for any purposes at the discretion of the Council if required.

Page 24

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

13. Restricted funds

At 1 January 2023
Income
Expenditure on charitable
activities
Transfers between funds
Investment gain/(losses)
At 31 December 2023		 Peter De
Wint Capital
Fund
£
4,551
-
-
-
-
4,551		 Peter de Wint
General Fund
£
147,632
2,262
(854)
-
4,534
153,574		 Whitcomb
Street Fund
£
26,132
-
(26,132)
-
-
-		 Total
£
178,315
2,262
(26,986)
-
4,534
158,125

The Peter De Wint Funds are held to provide relief of distress among members (including honorary retired members) of the Royal Watercolour Society.

The Whitcomb Street Fund is raising funds for the refurbishment of the new Gallery space.

Restricted funds (2022)

At 1 January 2022
Income
Expenditure on charitable
activities
Transfers between funds
Investment gain/(losses)
At 31 December 2022		 Peter De Wint
Capital
Fund
£
4,551
-
-
-
-
4,551		 Peter de Wint
General Fund
£
159,860
1,193
(903)
-
(12,518)
147,632		 Whitcomb
Street Fund
£
91,679
-
(44,699)
(20,848)
-
26,132		 Total
£
256,090
1,193
(45,602)
(20,848)
(12,518)
178,315

Page 25

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

14. Expendable endowment

At 1 January 2023
Income
Expenditure on charitable activities
Transfers between funds
Investment (losses)/gains
At 31 December 2023		 Total
2023
Total
2022
£
£
33,254
38,812
-
-
(2,202)
(2,437)
-
-
1,071
(3,149)
32,123
33,226

Part of a legacy received from the estate of Arthur Wise has been used to establish a prize fund for watercolour paintings in his memory.

15. Related party transactions

As described in the Report of the Council earlier in these financial statements, the charity has a close working relationship with the Royal Society of Painter-Printmakers and with Bankside Gallery Limited. Bankside Gallery Limited manages Bankside Gallery, 48 Hopton Street, London, on behalf of both the Royal Watercolour Society and the Royal Society of Painter-Printmakers.

The outstanding balances with related parties at the year-end are disclosed in Notes 7 and 8 above. The Royal Watercolour Society makes a donation to Bankside Gallery to cover a proportion of the running costs of the gallery, in recognition of Bankside Gallery’s role in helping the Society achieve its charitable aims. Donations may also be made if the Society decides to promote any exhibitions beyond its regular annual programme.

A summary of these donations during the year follows:

2023 2022
£ £
Donation towards running costs of Bankside Gallery 23,850 23,850

This expenditure is included in the Statement of Financial Activities under outgoing resources.

As recorded in Note 4 above, the Royal Watercolour Society owns a lease from the Corporation of London Borough of Southwark on 48 Hopton Street, London. Bankside Gallery is afforded full rentfree occupation and use of these gallery and office premises in return for granting an indemnity to the Royal Watercolour Society in respect of all outgoing and covenant obligations under the Lease. The value of this donation is not included in these accounts but is estimated to be £38,770 per annum.

Page 26

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

16. Comparative information

The information below is an analysis by fund for the year ended 31 December 2022

Income and endowments from:
Donations and legacies
Charitable activities
Investments
Total
Expenditure on:
Raising funds
Charitable activities
Total
Net income/(expenditure) before
(losses)/gains on investments
Net gains/(losses) on investments
Net income/(expenditure) for the year
Transfers between funds
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds carried forward		 Unrestricted
General
Funds
£
26,500
104,715
13,601
144,816
9,878
114,374
124,252
20,564
(57,541)
(36,977)
-
(36,977)
198,884		 Designated
Funds
£
267,000
-
-
267,000
2,891
3,437
6,328
260,672
(20,828)
239,844
20,848
260,691
480,284		 Restricted
Funds
£
-
-
1,193
1,193
903
44,699
45,602
(44,409)
(12,518)
(56,927)
(20,848)
(77,775)
256,090		 Expendable
Endowment
Funds
£
-
-
-
-
409
2,000
2,409
(2,409)
(3,149)
(5,558)
-
(5,558)
38,812		 Total
Funds
2022
£
293,500
104,715
14,794
413,009
14,081
164,510
178,591
234,418
(94,036)
140,382
-
140,381
974,070

Page 27

Royal Watercolour Society

Notes to the financial statements (continued) For the year ended 31 December 2023

17. Comparative Information (continued.)

The information below is a columnar balance sheet from the previous period

Fixed assets
Tangible assets
Investments
Current assets
Debtors
Cash at bank and in hand
Creditors: amounts falling
due within one year
Net current (liabilities)/
assets
Creditors: amounts due after
more than one year
Net assets
Charitable funds
Unrestricted income funds
Restricted income funds
Expendable endowment
Total funds		 Unrestricted
£
260,524
883,651
1,144,175
282,887
(29,301)
253,586
(84,702)
168,885
(410,179)
902,881
902,882
-
-
902,882		 Restricted
Expendable
Endowment
£
£
-
-
142,942
33,225

142,942
33,225

-
-
35,373
29
35,373
29
-
-
35,373
29
-
-
178,315 33,254

-
-
178,315
-
33,254
178,315
33,254
 2022
Total
£
260,524
1,059,818
1,320,342
282,887
6,102
288,988
(84,702)
204,287
(410,179)
1,114,450
902,882
178,315
33,254
1,114,451

Page 28