City and Guilds Art School Property Trust Annual Report and Financial ststements 31 August 2021 Company Lmniled by Guarantee Registration Number 992490 (England and Wales) Charity Registration Number 312871
Contents Reports Reference and administrative information Trustees, pOrt Independent auditols report Financial statements Statement of financial activities 11 Balance sheet 12 Statement of cash flows 13 Principal accounting policies 15 Notes lo the financial slalements 18 City and Guilds Art School Property Trusl
Reference and administrative infomiation Trustees John Taylor MBE (Chairman) Humphrey Carey Aidan Crawshaw Heather Hilburn Brendan Finucane QC William Parente CBE- retired 1010612021 Timothy Schroder- appointed 0411112020 Sir Alan Yarrow Seeretary Magnus von Wistinghausen Registered office Fishmongers, Hall London Bridge London EC4R 9EL Telephone 020 7626 3531 Prlnclpal offlce 124 Kennington Park Road London SE114DJ Telephone Facsimile 020 7735 231%% 020 7582 5361 Auditor Buzzacott LLP 130 Wood Street London EC2V 6DL Bankers Barclays Bank plc Soulhwark Branch 29 Borough High Street London SE1 1LY Company reglstration number 992490 (England and Walesl Charlty reglstratlon numbor 312871 City and Guilds Art School Property Trust 1
Trustees, report Year to 31 August 2021 The Board of Trustees I the Board'} of City & Guilds Art School Property Trust { the Charity'l presents ils annual report and the audited financial statements for the year ended 31 August 2021. The report has been prepared in accordance with Part 8 of the Charits'es Act 2011 and is also the report of the directors for the purposes of the Companies Act 2006. The financial statements have been prepared under the accounts'ng policies sel out therein and comply with applicable law and Accounts"ng and Reporting by Charities. Statement of Recommended Poctice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland IFRS 1021. Constitution The Charity is registered as 8 company and has the status ofa company limited by guarantee, not having 8 share capit81. Its governing document is ils Memorandum and Articles of Association dated 30 September 1970 and amended to allow for current govemance arrangements on 7 March 2006. Prlncipal alms and activities The principal aim of the Charity, which was founded in 1879, is lo support the teaching and training of students in the arts, crafts and sciences of the Fine Arts. Thi5 aclivity is consislenl with the objects contained within the Memorandum of Association of the Charity. On 31 March 2012. the educational activities of the City & Guilds of London Art School Ltd I the Art School") were transferred lo CGLAS Trust (Company No.. 078175191 under a business transfer agreement. CGLAS subsequently changed Its name lo the City & Guilds of London Art School Limited and is continuing the educational activities of the Art School. The Charrty changed its name on 17 April 2012 from the City and Guilds of London Art School to the City & Guilds Art School Property Trust. The objects of the Charity have not changed The Art School's land and buildings at 114- 124 Kennington Park Road were retsined by the Charity whose principal activity today is to maintain and develop these properties for the ongoing benefit of the Art School, in accordance with a phased maslerplan established in 2008109, This also includes the renting of additional property, such as the Old Vauxhall Telephone Exchange Building in adjacent Kennings Way, as required to deliver the maslerplan and lo support the Art School's development in other way5. Governance. structure and management Organisation The Trustees are directors of the Charity for the purposes of the Companies Act 2006 and are Trustees of the Charity for the purposes of Charity legislation. The Board is the policy-m8king body of the Charity. 11 is assisted by the Secretary, who is appointed by the Board. City and Guilds Art School Property Trust 2
Trustees, report Year to 31 August 2021 Govemance, structure and managernent Icontinuedl Organisation (continued) The Charity did not employ staff beeen 31 March 2012 and 1 April 2019. On 1 April 2019 the salaried post of Director was created and continued until 31 August 2021. Administrative, fundraising and other tasks are performed by staff employed by the City & Guilds of London Art School. An annual charge is levied by the Art School in consideration of this. Risk management The Trustees have assessed the major risks to which the Charity is exposed. In particular. these relate lo the Charity's finances, buildings and health and safety matters. All areas of risk are monitored through the Charity's governance structure which identifies the lines of responsibility and decision making adminislralive and financial, and in particular those relating lo the planning and execution of major building refurbishment projects. The Trustees ensure that the Charity s operations are protected against significant risk through an annual monitoring cycle and risk assessment. The Charity has a comprehensive insurance cover against key areas of risk.. in addition to Public Liability Insurance cover up to £10m and Directorfs Liability of cover of up lo £2m. The Charty's buildings are insured al their full re-build value. The Board is satisfied that systems are in place lo mibgale, or control where possible. the Charity's exposure to these risks. Key management personnel The key management personnel of the Charity are the Trustees and, until 31 August 2021, the Diwtor. Since then, the role of Company Secretary has been undertaken by the former Director. The Trustees do not receive remuneration from the Char(ty. Statement of Trustees, responsibilities The Trustees (who are also directors of the Property Trust for the purposes of eompany lawl are responsible for preparing the Trustees, report and financial slalements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Praclicel. Company law requires the Trustees lo prepare financial statements for each financial year which give a true and fair view of the stsle of affairs of the charitable company and of the income and expenditure of the charitsble company for that period. In preparing these financial statements, the Trustee5 are required lo.. select suitsble accounting policEs and then apply them consi51enlly', observe the methods and principles in Accounting and Reporting by Charities.. Slalemenl of Re¢ommended Practice applicable lo charities preparing their accounts in accordance with the Financial Reporbng Standard applicable in the UK and Republic of Iland IFRS 1021., City and Guilds Art School Property Trust 3
Trustees, report Year to 31 August 2021 Govemance, structure and management Iconlinuedl Statement of Trustees, responslbllitles (conlinu8d) • make judgements and eslimales that are reasonable and prudenL + s18te whether applicable United Kingdom Accounting Standards have been followed, subject lo any material departures disclosed and explained in the financial statements., and * prepare the financial statements on the going conTrfn basis unless it is inappropriate to presume that the charitable company will continue in operation. The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy al any time the financial position of the charitable company and enable them lo ensure that the financial slalements comply with the Companies Aet 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Each of the Trustees confirms that.. so far as the Trustee is aware, there is no relevant audit infom)alion of which the Charity's auditors are unaware.. and • the Trustee has taken all the steps that he or she ought to have taken as a Trustee in order to make themselves aware of any relevant audit information and to establish that the Charity's auditors are aware of that information. This confimialion is given and should be interpreted in accordance with the provisions of $418 of the Companies Act 2006. Board of Trustees The members who are in office al the date of this report are listed on page 1. No Trustee received any remuneration for services as a member of the Board12020- none) and no Trustee was ieimbursed for Iravelling expenses (2020 - none). Objectives and relevant policies The Charity's objectives are set lo reflect ils educational aims and ethos. In setting these, the Trustees have given due consideration to the Charity Commission's general guidance on public benefit. The Charity's key objects'ves for the year included.. * Maintaining the Charity's property in good order for the benefit of the Art School, through a programme of annual maintenance and repair work., Extending Planning Permission and Listed Building Consent for the approved scheme to renovate and partially redevelop Victorian studio buildings at the rear of 118-124 Kennington Park Road., City and Guilds Art School Property Trust 4
Trustees, report Year to 31 August 2021 Objectives and r8levant policies Iconb'nuedl + To continue lo support the Art School in ils work in any other ways appropriate, in line with the Charity's slated objects. Grant*lvlng pollcy The Property Trust does not actively solicit grant appliealions, however from time lo time may award grants lo inslilutions. In previous years the Property Trust has made grants to the City and Guilds of London Art School. in order lo further the Trust's objective to support the Art School. The grant amounts are discussed and approved by the Board of Trustees. Activities and achievements Development project and other refurbishmgnts Al the beginning of the year, the Property Trust cornpleled the creation of a new suite of conservation studios in the Art School's Geofgian lerffice buildings, along with new Fine Art studios in the adjoining Old Vauxhall Telephone Exchange building in spaces rented from BT. This supported the academic portfolio expansion In Conservation and addressing additional space requirements lo operate the Art School during the Covid-19 pandemic, as well as allowing future growth in recruitment across the Art School's course portfolio. Due to the Covid-19 pandemic no further development work took pla during the year, and planning for the next phases of masterplan related works was put on hold for the lime being. Financial Review Results for the year The Charity's funds structure is made up of unrestricted funds, the general fund and the designated fixed asset fund. as well as striCted funds th81 are held for specific purposes. In order to separate the impact of the property development within the financial stalemenls, the Charity established a designated fund to represent the value of its tangible fixed assets. When the Charity incurs expenditure on tangible fixed assets, which is capilalised, the amounts are transferred from other revenue funds lo the designated fund. The restricted funds of the Charity relate lo funds received for the developrnenl of the properties. These funds are either expended during the year on the properties or transferred to the designated fixed asset fund when costs are incurred for work on the properties which is capilalised. The Charity recorded an operating surplus on unrestricted funds before transfers of £2.55712020- £43,808). Due lo the temporary suspension of capital development work and the impact of the Covid pandemic, the Charity raised £nNI of restricted donations during the year12020- £425,000). The Charity expended £118,419 12020 £305,526) in latIon to the development of ils buildings during the year. This related lo the completion of the aforementioned development projects at the beginning of the financial year. The Charity capitslised a total of £nil of fixed asset addilions12020 - £58,479). City and Guilds Art School Property Trust 5
Trustees, report Year to 31 August 2021 Financlal Revlew Iconlinuedl Reserrfes policy and golng concem The Board has examined the requirement for free reserves i.e. those funds not invested in tangible fixed assets, not designated for specific purposes, not restricted and not otherwise committed. At 31 August 2021 the Charity held nalIve free reserves of £18,564 due to a transfer of a deficit in restricted funds. The Charity secured an additional loan facility lof £150,000) in 2019120 to asslst with working capital needs during a period of redUd development and related fundraising aclivily. This was fully drawn down during the year and is repayable over a pellod of 3 years starting May 2021. The Board has reviewed the Charity's cash flow position and consider that the Charity has sufficient working capital lo meet the Charity's liabilities out of its core rental income as they fall due. The Trustees have concluded that there are no material un¢ertainlies related lo events or conditions that may east significant doubt on the ability of the Charity to continue as a going concern. Flnanclal position The balance sheet shows lotsl funds of £1,641,32712020 - £1,838,404) of which £Nil12020 £63.7571 is restricted. Restricted funds either raised for. and their use restricted lo, specific purposes or comprising donations subject to donor imposed conditions, have beèn used in accordance with these restrictions. Unrestricted funds of the Charity at 31 August 2021 lolal £1,641,327 12020 - £1,774,646) These funds 8re represented by general fund tangible fixed assets of £1.659,891 12020 £1.741,1061 and a free reserves deficit of £18.56412020- surplus of £33.5411 Future plans While significant development activity has currently paused, the Propety Trust will continue to work with the Art School on progressing with other works to undertake specific improvements lo buildings and facilities on the Kenninglon sile, and to plan for the next phases of mssterplan works in due course. A priority for the irnmediale future will lo renew the Planning and Listed Building Consent for a scheme lo refurbish and partially redevelop Victorian studio buildings 21 the rear of the Art School sile beyond Autumn 2022 for a further period of three years. The Charity's assets Acquisitions and disposals of fixed assets during the year are recorded in the notes to the financi81 stslements. Approved by the Board on JRJ (IknL ryoi and signed on ils behalf by.. John Taylor MBE Ichaimianl City and Guilds Art School Property Trust
Independent audltor's report Year lo 31 August 2021 Independent auditor's report to the members of Clty & Guilds Art School Property Trust Oplnlon We have audited the financial slalements of City and Guilds Art School Property Trust Ilhe 'charilable company'} for the year ended 31 August 2021 which comprise the statement of finan¢ial aclivilies, the balan sheet. the statement of cash flows, the principa1 aecounling 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 Stsndards, including Financial Reporting Stsndard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland. (United Kingdom Geneolly Accepted Acwunling Praclicel. In our opinion, the firsancia5 statements.. give a true and fair view of the slate of the charitable company's affairs as at 31 August 2021 and of ils income and expenditure for the year then ended.. have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice., and have been prepared in accordance with the requirements of the Companies Act 2006. Basis for oplnlon We conducted our audit in accordance with International Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further descr1bed in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charilab5e company in accordance with the ethical requirements that are relevant to our audit of the financial slalemenls 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 obtsined is sufticient and appropriate to provide a basis for our opinion. Conclusions relating to going ¢oncem In auditing the financial slalements, 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 h3ve performed, we have not identified any material uncertainties relating to events or condition5 that, individually or collectively. may cast significant doubt on the charitable company's ability to continue as a going conrn for a period of at least e1ve months from when the financial stslements are aulhorised for issue. Our responsibilities and the responsibilities of the trustees with respect to going conrn are described in the relevant sections of this report. other inforrnation 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 ststemenls does not cover the other information and, except to the extent otherwise explicitly slated in our reFX)rt, we do not express any form of assurance conclusion Ihereon. City and Guilds Art School Property Trust 7
Independent auditor's report Year to 31 August 2021 Other infomiation Iconlinuedl In connection with our audit of the financial stalemenls, our responsibility is lo read the other information and. in doing so, consider whether the other information is materially inconsislenl with the financial statements or our knowledge obtained in the audit or otherwise appears lo be materia5Iy misstated. If we identify such material inconsistencies or apparent material misstatements. we are required lo determine whether there is a material misstslemenl in the financial statements or a material misslalemenl of the other inforrnalion.11, based on the work we have performed, we conclude that there is a material misstalementof this other information, we are required lo report that fact. We have nothing to port 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.. • the infomiation given in the Iruslees, report for the financial year for which the financial slalement5 are prepared is consislenl with the financial statements", and • the trustees. report has been prepared in accordance with applicable legal qUIrements. Matters on which we are requSred to report by exception In the light of the knowledge and understsnding of the charitable company and ils environment obtained in the course of the audit, we have not identified material misslalements in the trustees, report. We have nothing lo report in respect of the following matters in relation to which the Companies Act 2006 requires us to report lo you if, in our opinion.. adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us., or • the financial statements are not in agreement with the accounting records and returns., or certain disclosures of trustees, remuneration specified by law are not made,. or we have not received all the information and explanations we require for our audit., or the trustee5 were not entitled lo prepare the financial statements in accordance with the small companies regime and take advantage of the small companies, exemptions in preparing the trustees, report and from the requirement to prepare a strategic report. Responsibilities of trustees As explained more fully in the trustees, responsibilities statement, the trustees are responsible for the preparation of the financial statement5 and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary lo enable the preparation of financial statements that are free from material misststement, whether due to fraud or error. In preparing the financial slatemenls. the trustees are responsible for assessing the charitable company's ability to continue as a going concem, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend lo liquidate the charitable company or to cease oper81ions, or have no realistic alternative but lo do so. City and Guilds Art School Property Trust
Independent auditor's report Year to 31 August 2021 Auditor's responsibilitigs for the audit of the financial statements Our objectives are lo obtain asOnable assurance about whether the financial statements as a whole are free from m2teiial misstatement, whether due lo fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of a55uran¢e. bul is not 2 guarantee that an audit conducted in accordance with ISAS IUKI will always delect a material misstslement when il exists. Misslalemenls can arise from fraud or error and a considered material if, individually or in the aggregate, they could reasonably be expected lo inflijence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-complian with laws and regulation$. We design procedures in line with our responsibilities, outlined above. to delect material misstalemenls in respect of irregularities. including fraud. The extent lo 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-¢ompli8nce with laws and regulations, was as follows". the engagement partner ensured that the engagement team llectIVelY had Ihe appropriate competence, capabilities and skills to identify or recognise non-complianee with applicable laws and regulats'ons., we obtained an understanding of the legal and regulatory frameworks that are applicable lo the charitable company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements a those that relate lo the reporting framework Istatement of Recommended Practice.. Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland IFRS 1021 and the Charities Act 20111, Companies Act 2006 and those that relate to data protection (General Data Protection Regulalionl", and identified laws and regulations were communicated within the audit team regularly and the team remained aSert lo instances of non-compliance throughout the audit. We assessed the susceplibilily of the charitable company s financial statements to material misslalement, including obtaining an understanding of how fraud might occur, by". making enquiries of management as to their knowledge of actual, suspected and alleged fraud,. and considering the internal controls in place to mitigate risks of fraud and non-compliance with law5 and regulations. To address the risk of fraud through management bias and override of controls, we.. performed analytical procedures lo identify any unusual or unexpected relationships., tested journal entries lo identify unusual transactions", assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias", used dats analytics to investigate the rationale behind any significant or unusual transactions,, City and Guilds Art School Property Trust 9
Independent auditor's report Year lo 31 August 2021 Auditor's responsibilities for the audlt of the financial statements Icontinuedl tested authorisalion controls on expenditure Items, ensuring all expenditure was approved in line with the charitable company's financial procedures,. and Perfomied subslanlive testing over Income lo gain assurance that the Income recognised was materially complete. In response lo the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited lo.. agreeing financial statement disclosures lo underlying supporting documentation., reading the minutes of meetings of those charged with govemance". and enquiring of management as lo actual and potential liligalion and claims. There are inherent limitations in our audit procedures described above. The more remov that laws and regulations are from financial Iransaclions. 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 lo enquiry of the directors and other management and the inspèction of regulatory and legal correspondence, if any. Material misslatemenls that arise due lo fraud can be harder lo 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 al ww.frc.org.uklauditorsresponsibililies. This descripbon forms part of our auditor's report. Use of our report This report is made solely to the charitable ¢omp8ny's members, as a body, in accordan with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state lo the charitable company's members those matters we are required to state to Ihern in an aLJdilor's report and for no other purpose To the fullest extent permitted by law, we do not acTrpl or assume responsibility lo anyone other than the charitable eomp8ny and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed. 7 April 2022 Hugh Swainson, Senior Stalulory Auditor For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL City and Guilds Art School Propety Trust 10
ststement of financial activities Year to 31 August 2021 DRAFT UnTrstri¢ted lund$ 2021 Totsl funds 2020 Total funds General D8sun8ted Restricted fund funds funds Notes Income from.. Donation5 charitab activities Rent reIVable Totsl In¢ome 425.QC 15 241.574 241.574 241.574 241.574 193.919 618,919 Expendlture on- Charitable activili8S Costs of opèrating Ihe Charfy . Premis . Support ¢osts Total expendlture 137,392 101.625 239.017 81,215 118,419 337,028 101,62S 438,651 493,908 108.868 602.575 81.215 118.419 Not In¢om¢ l¢xp¢ndltstr¢l 2.557 181.2151 1118.4191 1197,077 16,344 Transfers belween fund8 9.10 154,6621 $4.862 Net movement in funds 152,1051 181.2151 163.7571 1197.0771 16,344 Fund balances brought lorward at 1 September 2020 33,541 1,741,106 63.757 1,838,404 1.822,0 Fund balances caNied fotward at 31 August 2021 118,5641 1,659,891 1,641,327 1,838.404 All of the Charity's activities derived from continuing operations during the above two financial years. The Charity has no COgnised gains and losses other than those shown above. A comparative statement for the pVIouS year is included in note 16. City and Guilds Art School Property Trust 11
Balance Sheet 31 August 2021 2021 2021 2020 2020 Notes Fixed assets Tangible assets 1,659,891 1,741,106 Current asaèts Debtors Cash at bank and in hand 77.900 103,669 181,569 43.465 153,330 196.795 Creditor¥'. arn¢unts falling due within one year Net current assets Totsl •ssèts lass current 7 1114,3901 199.4971 67,179 97,298 1,727,069 1,838,404 Crèditots: falling due after more than one year Total net assets 185,7421 1.641.327 1,838,404 The funds of the charity.. Income funds". Restricted fund5 Unrestricted funds". General fund Designated funds 63,757 10 118,5641 1,659,891 1,641,327 33,541 1,741,106 1,838,404 Approved by the Board on ¥L,-J th .L Tr2yand signed on its behalf by.. John Taylor MBE (Chairman) City and Guilds Art School Property Trust.. A company limited by guarantee, Company Registration No. 992490 (England and Wales) City and Guilds Art School Property Trust 12
Statement of cash flows 31 August 2021 Year tr 31 August 2021 Year to 31 August 2020 Notes Net cash flows frorn operatlng aGtlvlt185 1135,4041 17.6731 Net cash flows from in inv95tsng a¢tivitl¢s 158,4791 Net Ush fltsws from financing activlties 85,742 116,0301 Change in ush and Ga5h equtvalents in the year 149.6621 182,1821 Cash and Ga5h equi¥alen15 al the beginning of the year Cash and cash equlvalents at th8 end of the year 153.331 103,669 235,515 153,330 Notes to th8 cash flow statement for th8 year to 31 Augu$t 2021 Reconciliation of net 4ncomoto net cash {ed inl provided by operatlng activltles 2021 2020 Net incorne DepreciatKn charge Decrease lin¢reasel in debtors Decrease in creditofs Net cash (used Inl provlded by op8raUng actlvltl85 1197,0771 81,215 134,4341 14,892 1135,404 16.344 106.938 102.581 1233.5351 17,6731 Cash flows from investing actlvltles.. 2021 2020 Purchase of tangible fixed a5set5 Net cash used In Investlng actfvitl83 158,4791 158,4791 C Cash flows from fonanclng actlvttées.. 2021 2020 Repayments of bolrowing New loan taken out Net cash used In flnanclng actlvlt168 164,2581 150,000 85,742 116.0301 116,0301 D Analy$l$ of Gash and G•sh equlvalgrits 31 August 2021 31 August 2020 Cash at bank and in hand 103,669 1S3,331 City and Guilds Art School Property Trust 13
statement of cash flows 31 August 2021 Any55S of ¢hanges In not debt Al 1 September 2020 At31 August 2020 Cash flows Cash al bank and in ha 153.331 149,6621 17.480 103,669 148,5441 185.7421 130,6171 Loan payments falling due within one year Loan paymenis falling due after more than one year Total 166,0241 185,7421 1117,9241 87.307 City and Guilds Art School Property Trust 14
Principal accounting policies 31 August 2021 Basls of accountlng The financial statements have been prepared under the historical cost convention with items initially recognised al cost or transa¢tion value un5ess otherwise stated in the relevant accounting policy nolels}. The financial Statements have been prepared in accordance with Accounting and Reporting by Charities.. Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 I'charilies FRS 102 SORP'I, the Financial Reporting standard applicable in the UK and Republic of Ireland IFRS 1021 and the Companies Act 2006. The charity constitutes a public benefit entity as defined by FRS 102. The accounts are presented in sterling and are rounded lo the nearest pound. Critical accountlng estimates and areas of ludgement Preparation of the 2ccounls requires the Tru51ees and mat)agement to make significant judgements and eslimales. The items in the accounts where these judgements and estimates have been made include.. • the usefu1 economic lives attributed lo tangible fixed assets used lo determine the annu81 depreciation charge., and eslimales in respect to accrued expenditure. In addition lo the above, the full impact following the recent emergence of the global coronaviru5 pandemic is still unknown. It is therefore not currently possible to evaluate all the potential implications for the charity's activities, beneficiaries, funders, suppliers and the wider economy. As set out in the going concern accounting policy, the trustees have considered the impact of the pandemic on the charity and have concluded that although there may be some negative consequenTrs, it IS appropriate for the charity to continue lo prepare its accounts on the going concern basis. City and Guilds Art School Property Trust 15
Principal accountlng pollcies 31 August 2021 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 dale of approval of these financial statements. The Board has examined the requirement for free reserves i.e. those funds not invested in tangible fixed assets, not designated for specific purposes, not restricted and not otherwise committed At 31 August 2021 the Charity held negative free reserves of £18,564 due to a transfer of a deficit in restricted funds. The Charity secured an additional loan facility lof up lo £150,000) in 2019120 to assist with working capital needs during a period of reduced development activity. This was fully drawn down during the year and is repayable over a period of 3 years starting May 2021. The Trustees have reviewed the Charity's cash flow position and consider that the Charity has sufficientworking capital to meet the Charity's liabilitie5 Out of core rental income as they fall due and the financial statements have been prepared on the going concem basis. The Trustees have concluded that there are no material UnrtaIntieS related lo events or conditions that may cast significant doubl on the ability of the Charity to continue as a going concem. Income Income is recognised in the period in which the Charity is entitled lo its receipt an(J the amount can be measured with reasonable certainty. Fees receivable and charges for services and use of premises are accounted for in the period in which the service is provided. Expendlture Expenditure is included in the ststemenl of financial activities when incurred. Expenditure comprises the costs of ¢harilable activities on the Charity's primary charitsble purpose, i.e. the operation of the Charity. The cost$ of operats'ng the Charity include the costs of premises and governance costs. Grants payable are included in the slalemenl of financial activities when approved by the trustee5 and when the intended recipient has either received all the funds, or has been informed of the decision to make the grants and has satssfied all relevant and due terms and conditions. Tangible fixed assets Assets are included in these financial slalements at cost al the date of acquisition together wrth the cost of additions and improvements to date. Depreciation is provided al the following annual rates in order lo write off each asset over its estimated useful life.. • FehOld property 2ts on cost; • Freehold propety improvements 4°A on $1. • Leasehold property The minimum life of the lease. City and Guilds Art School Property Trust 16
Principal accounting policies 31 August 2021 Debtors Debtors are recognised al the settlement amount. less any provision for non-recoverabilily. Prepayment5 are valued at the amount prepaid. They have been di5¢0unted to the present value of the future cash receipt where such discounting is material. Cash at bank and In hand Cash al 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. Deposits for more than three months but less than one year have been disclosed as short lemi deposits. Cash placed on deposit for more than one year is disclosed as a fixed asset investment. 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, il is probab5e that a transfer of economic benefit will be required in settlement. and the amount of the settlement can be estimated reliably. CdItorS and provisions are recognised al the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the futu cash payment where such discounting is material. Financial instruments The Trust only holds basic financial instruments as defined in FRS 102. The financial assets and financial liabilities of the Trust and their measurement basis are as follows.. Financial assets trade and other debtors are basic financial instruments and are debt instruments measured al amortised cost as detailed in note 6 Prepayments are not financial inslrumenls. Cash at bank- is classrfied as a basic financial instrument and is measured at face value. Financial liabilities- trade creditors, accruals and other creditors are financial inslrumenls. and are measured al amorb'sed cost as detailed in note 7. Taxation and social security are not included in the financial instruments disclosure definstion. Deferred income is not deemed to be a financial liability, as the cash settlement has already taken place and there is an obligation to deliver services rather than cash or another financial inslrumenl. Fund accounting The general fund comprises those monie5 which may be used towards meeting the charitable objectives of the Charity al the discretion of the Board. Within unrestricted funds, the designated fund represents the nel book value of the Charity'5 langible fixed assets. The restricted funds are monies raised for, and their use reslri¢led to, a specific purpose, or donations subject to eonditions imposed by the donor. City and Guilds Art School Property Trust 17
Notes to the financlal statements Year to 31 August 2021 1 Net expendlture This is stated after charging.. Gener81 Designated fund funds Restricted funds Total 2021 Audi(0rf5 muneratiOn.. Slalutory audit Services D8prèuation Operating le8se rentsls 4.300 4,300 81,215 95.774 81.215 95,774 General Designated fund lunds Restricted lunds Total 2020 Audilorfs remuneration". Statutory audit services Oepre(ll8tion Operating lease rentals 3,950 3,950 106,938 49,846 106,938 49,846 2 Support costs 2021 2020 Salaries and management chaiges from the City & Guilds of London Art School Insuran Legal and profe5sitsnal fees Governance costs Interest on loans and bank charges 71,000 15,766 4,132 5,185 5,542 101,625 69.577 15.498 11.922 5.350 6,320 108,668 3 Staff cost5 and Trustees, remuneration The average number of stsff employed by the charity in the year was 1 al 0.4 FTE12020- 0.4FTEI, increased lo 0.6 FTE for six months for additional work carried oijt for the Art School and refunded through a management Charge. The Charity's total staff costs in the year were £41.58012020- £31,473}, of which £nil and £1,980 was in respect of employe¢s Nl and pension contributions respectively, for the year lo August 2021 (£1,829 and £1,574 respectively for the period from April to August 20201. Management services were provided to the Charity by the City and Guilds of London Art School costing a net £29,42012020 £41,077). No Trustee received any remuneration or other emoluments in respect of their seNices as a member of the Board during the year12020 none). No Trustees were reimbursed for travelling expenses during the year12020 - none). The Charity has purchased insurance to protect itself from any loss arising from the neglect or defaults of ils Trustees, employee$ 2nd agents and to indemnify the Trustees or other officers against the consequences of any neglect or default on their part. The insurance premium provided cover of up to a maximum of £2 million (2020- £2 million}. City and Guilds Art Schoo5 Property Trust 18
Notes to the financial statements Year lo 31 August 2021 3 Staff costs and Trustees, remuneration Icontinuedl The aggregate remuneration of key management personnel was £41,58012020- £27,900). In the year ended 31 August 2021, key management personnel Consisted of the Trustees and the DirectorlSecret8ry. 4 Taxation City & Guilds Art School Property Trust is a registered Charity and therefore is not liable lo income lax or corporation tax on Income derived from ils charitable aclivilies, as il falls within the various exemptions available lo registered charities. 5 Tangible fixed assets Freehold Freehold land and property property improvements Leasehold property Totsl o¥t At 1 Sepletnbèr 2020 Additions At 31 August 2021 382,169 595.872 1,472,585 2.450.626 382,169 595.872 1,472.585 2,450.626 Depreciation At 1 September 2020 Charge for year Al 31 August 2021 336,298 13,031 349,329 208.249 8.035 216,284 164,975 60,148 225,123 709.522 81,214 790,736 Net book ¥•lues At 31 Augu512021 At 31 Au9Us12020 32.840 45.871 379,588 387,624 1.247,462 1.307,610 1,659,890 1,741,105 No formal valuation of Freehold land and property has been conducted during the year, but in the opinion of the Trustees, the market value of the freehold property is well in excess of the figure shown above. 6 Debtors 2021 2020 Other debtors VAT reclaimable on premises expendrture 77,900 43,465 43.465 77,900 City and Guilds Art School Property Trust 19
Notes to the financial ststements Year to 31 August 2021 7 Credltors". amounts falling due withln one year 2021 2020 Trade creditors Loan. Social security and other taxes Other creditors Accruals and deferred income 28.732 48,544 3,334 8.533 66,024 560 2.469 21,912 99.498 33,780 114,390 Included within creditors is the following deferred income, analy5ed as follows". 2021 2020 At 1 September Deferred in the year Released in thè year Al 31 August 16,761 16,762 116,7621 16,762 18,029 16,762 116.0291 16,762 he 2021 loan balance above is in respect of a bank borrowing facility with Charity Bank in respect of which the charity drew4own £150,000 11 is being paid back by the charity on a monthly basis along with interest at 4.250kn above the Bank of England base rale per annum, and will be fully repaid by April 2024. It is Secu via a charge on the charity's 114 & 116 Kenninglon Park Road properts'es. Credltors.. amounts falling after more than one year 2021 2020 Loan 8S,742 9 Restrictod funds The income funds include restricted funds comprising the following donations and grants held on trusts lo be applied for specific purposes.. B8lanc8 Balance at31 August 2021 September 2020 Donations Expenditure Transfer3 Development Fund 63.757 1118,4191 54,662 8alartce atl September 2019 8alar>o8 èt31 August 2020 Donatffjons E¥ponditu Tfrxnsfe Development Fund 42,765 425,CQO (345,526) (58,481J 63,757 City and Guilds Art School Property Trust 20
Notes to the financial ststements Year to 31 August 2021 9 Restrlcted funds Icontinuedl The Development Fund represents funds donated for the specific purpose of funding the Charity's Masterplan development. Expenditure on work which is capital in nature Is transferred lo a designated fixed asset fund, as exPlaned in note 10 below. Expenditure relating lo professional fees for design and other planning work on current and future maslerplan phases are expended. 10 Unrestricted Funds Balance al 1 Septembei 2020 Balance at1 Saptsmber 2021 Inctsme Expenditure Transfers General Fund Designated Fund 33,541 1.741,106 1.774,647 241,574 1239,0171 {81,2151 1320,2321 154,6621 118,5641 1,659,891 154.6621 1,641,327 241,574 Balance al 7 September 2Q19 Balanc8 8t I September 2020 Income Expenditu rransfers Gener81 Fund Designated Fund (70.267) 1. T89.562 1, 779,295 793,919 {150, 1111 (106,9581 (257,0491 33,541 1.741. 106 1.774.647 58.487 58.481 193,919 Designated fixed assets funds.. In order lo separate the impact of the property development within the financial ststemenls. the Charity established 8 designated fund to represent the value of its tangible fixed assets. When the Charity incurs expenditure on tangible fixed assets. the amounts are transferred from other revenue funds lo the designated fund. A lolal of £nil {2020 £58.4811 was transferred to the designated fund during the year representing capital additions. In 2020, £58,481 of this capital work was funded from restricted revenue funds raised. This year, no capital work was funded from the general fund 12020 - nonel. The general fund showed a deficit of £18,564 {2020- surplus of £33,541) al the end of the financial year. City and Guilds Art School Property Trust 21
Notes to the financial statements Yearto 31 August 2021 11 Analysls of net assets between funds General Designated lund funds Restricted funds Total 2021 Fund bal¥nc•s at 31 August 2021 are represented by.. T3ngible fixed assets Current assets Credrtors.. amounts falling due wthin one year Credilors.. amoLJnt falling de in more than one year Total nel assets 1,659,891 1,659,891 181.568 181.568 1114,3901 1114,3901 185.7421 118.5641 1,S59,891 185,7421 1,641,327 Genetsl Designated fund funds R&stlFCted funds Total 2020 Fund balances at 31 August 2020 are reprèsèntsd by: Tangible fixed assets Current assets Creditors.. amounts falling due within one year Credittsrs". amount falling due in more than one year Total net assets 1, 741, 106 1.741. 105 196,795 133,037 63,757 (99,497) (99,497) 33,547 1, 741, 106 63. 757 1.838,403 12 Llabillty of mernbers The Charity is consliluted as a cornpany limited by guarantee. In the event of the Charity being wourid up members are required to contribute an amount not exceeding £1 each. 13 Leaslng commitments Opèratlng leases At 31 August 2021 the total of the Charity's future minimum payments under non-cancellable operating leases was.. BLtildings 2021 2020 Amounts due within one year Amounts due between one and five years 95,774 95,774 95.774 197.333 14 Capital cornmitments As al 31 August 2021, the Charity had capital commitments of £nil12020 - £41,819) City and Guilds Art School Property Trust 22
Noles to the financlal statements Year to 31 August 2021 15 Related party transactlons During the year, one Trustee of The City & Guilds of London Art School served on the Board of the City and Guilds Art School Property Trust- B Finucane. The City & Guilds of London Art School 15 therefore considered a related paty. The Trust recognised rental income from the Art School of £241,574 plus VAT in rent during the year12020- £193.919 plus VATI The Art School charged the Chanty a management fee for serViS provided of £29,420 12020 - £41,677} 16 Comparatlve statement of financlal activities un$triCd funds 2020 Total funf15 General Designaied Restricted fund funds funds Incom? from: Donations Charitable activit$ Rent receivable Total income 425.000 425.000 193.919 193,919 193,919 618,919 425.000 Expenditure on- Charitable activrtvas C051s of operating the Charity . Premises . Support ¢osts Total expondtture 81.443 68,668 150.111 1LK,938 305,526 40,000 345,526 493,908 106,668 602,575 1,938 Net In¢om¢1gxpondlturel 43,808 1106.9381 79,474 16,344 Transfers fvnd5 58.481 158,4811 Net movement In fund5 43.808 148.4561 20,992 16.344 Fund balances brought forward at 1 Septernber 2019 110,2671 1,789,582 42,765 1,822,060 Fund balance5 carried forward at 31 August 2020 33,Y1 1,741,1L 63,757 1,838,403 City and Guilds Art School Property Trust 23