Company règistration numbgr.. 06147572 Charity registration number.. 313612 Watts Gallery Trust IA company11mlled by guar8nleBI Annual Report and FlnBncial Slaletnenls for the Year Ended 31 March 2023 Previously known as Watts Gallery Watts Gallery Trust Contents Reference and Adrninislrative Details TTuslees' Report 21014 ststemenl of Tru8lees' Responsibilities 15 Independent Audiiorfs Report 161019 C(A)solidated Statemènt of Financial Activities 20to21 Consolidated Balance Sheet 22 Balance Sheet 23 Con501idated Statement of Cash Flows 24 Notes to the Financial Statements 251054 Watts Gallery Trust Reference and Administrative Details Chair of Trustees S Klng Company Number 06147572 Charily Numbèr 313612 Register8d office Down Lane Compton Guildford Surrey United Kingdom GU3 10Q Audltor Azets Audit Services Lim1ted Ashcombe Court Wotslsack Way Godalming Surrey Unil8d Kingdo GU7 1LQ Investm9flt Advisor5 GCLA Senator House 85 Queen Victoria Straet London EC4V 4ET Additlonal inforniatlon Addition81 informallon is available in the annual report on the websilts through the following link www.watts .01 .uklour-chaii Itrusleesl. Page I Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 Financlal Statements The Tiustees present Ihelr report and the auditéd financial statements of the charity for the year anded 31 MarGh 2023. The Trustees have adopted the provisbons ol the Slalemenl of Recommended Practice {SORPI"Accounling and Reporting by Charilies. IFRS 1021 in prgparing lh6 annual report and financial statements of the charity. Thè Ilnancia1 stslemenis have been prepared in accordance wlh the a¢¢ounllng poli¢les set out in note I to the accounts and comply wllh the Chari1185 Acts of 2011 and 2022. the Cotllpanies Act 2006, the Memoiandum and ArtiGl•s of Association. and Accounting and Reporting by Charilies.. Slalement of Recommended Piacllce applicable to Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republio of Ireland IFRS 1021 leffeclivg 1 January 20191. Trustees T Ad8ir (resigned 13 June 20221 G Anson M Beisly Iresioned 27 Sep19mber 20231 M Bowcock, CBE (resigned 2S September 20231 D R Brenninkmeijer lappoinled 26 September 20221 D Brice (resigned 27 Sepl@mber 20231 A 6urtenshaw M Holt (appointed 11 April 20221 S K King (Ghair ol Truste88 - oppoinled 29 May 20231 M Macintyre lappoinled 14 April 20221 R Napier, DL, CBE (resigned 31 May 20221 U D Neblett-Leigh (appointed 13 February 20231 K C Ntumba lappoint8d 13 February 20231 Dr G K Oberoi18ppolnled 15 May 20231 Professor Dame M O(Sundo, OBE Dr M A Rogers, GBE I￿sIgned 15 May 20231 F A Rutler lappoinled 13 June 20231 M Stevens (resigned 30 April 20231 OVERVIEW.. Chair of Trustee's Statement: The vision that Mary and George Watts had when they created Watts Gallery - Ih8t art and creativ has a role in everyone's lives is what drew to this organi5ation. Now enlgring ils 120th y88r, l am delighted lo have been appoinled Chair of Trustees and would like to lake this opportunlly to thank outgoing Chair MaryAnne Slevens for her dedication and SLJPPOrt of Walls Gallery Trust as a Iru51ee, Deputy Chair and forfive and a half years, Chair of Trustees. Watts Is so much more than just an attractive gallery to display one oouple's art- when taken with Iheir home-sludio, the Grade I listed Chapel and th@ Compton Pottery all became core components of an innovallve social experimBnl that provided tralning and jobs and created in the Chapel one ol the most 8Ktr8ordinary small buSldings in the country. 'Art for All by All. is a vislon in which everyone can see art and cr83te art whether he￿ on sile or out In the cornmunity where we can create more opportunities for creativity and Teach more people. Meeting the societal need for children, young people and adults to have access lo creatlve 16arning Ihrovgh art and nature is critical lo our mission and I look forward lo ensuring we @mpower future generations as we look lo the future. I was excited lo see the organisation's first performance inslallalion 8eyond the Waves, iri collaboralion with StopGap Dance and Disability Arts in Surrey IDAISYI, foregrounding performers, responses lo G F Walts, sculplural practice. Shining a light on Mary Page 2 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 Watts 85 an artist and deslgner, a visionary, and a soci81 reformerwho was ahead of her lime and lived In 8 period when female artists faced significant barriers is particularly crucial. I was delighted by th8 reimagining ol the Mary Walls Gallery and Compton Gall8ry at Limners18ase, so as to 1011 her story more effectivety. Given th8 impact ol Govld and the wider ongolng posl-pandemic economic challenges in the economy. a planned deficit was forecast for thig financial year as we continue through what we anticipate being a five-year recovery period. D85Plte the severe unexpected economic headwinds durin9 the y88r, Iha Gallery reduced its annu81 core operating budget deficit from the previous year. Howev8r, markel turmoil led to a decTease In the value of OLJr investments lor the year of £246,913 las oontext, the value of the organlsalion's investments grew by £183,839 in the prior year and by £721,317 in the year lo March 20211. In addition, a depreciation tharge of £272,126 has impacted the overa51 consolidated budget deficit. Notwithslandlng the challenges facing the cuKural sector and the conclusion of both a £100,000 pa fDUr- year grant from Surrey County Council as well as a five-year Arts Council England National Portfolio Organisation funding agreement of £101,840 pa during the year, slgnificanl strides forward were achieved a5 the report demonstrates. With a new Board and slralegy under development and a reduced deficit lorocast for the yèar ahead, we look forward to ensure a return to a break evgn budget by 2025126. On behalf ol the Trustee Board, I would Ilke to thank staff, volunteers and supporters allke for maklng Walls Gallery such a vibrant part of its community. Sarah K Klng, Chair of Trustees, Watts Gallery Trust Page 3 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 Dlrector's Statement: Whilst the last year has nol be8n withoul significant challenges lor Watts Ga11ery Trust as for much of the sector and Country, l am grateful to the dedicated staff and volunteer teams and our supporters for enabling our organisalion to achieve so much in the last year. This year saw Ihg successful conllnualion of our planned board Iransilion, the introduction of an updated Vision and Mission and e new len-year sliategy, consisting of four objectives lo support the Museum lo build on lis strengths and lulfil ils potential. The year saw two major restoration programmes thal have considerably strengthened our vlsilor offer. The re-opéning of Limntsrslease arter r8Storalion of thè house and sludlos following 8 flfteen-monlh closure following the fire in September 2020 was a major achievemgnt, wlth the domestic interiors of the house open lo a11 visitors for the first Ilme in the hous&'s history. Significant new displays and inlerprelatlon that In partlcular highlightthe art. lrfe and social mission of Ivlary Watts. Iradilionally under- repr858nled, have addèd greatly lo our offer, as has the work lo rolurn GF Walls. Groat Studio. Thal IhSs inspiring creative space has been returned lo Its origir)al oolour scheme and display, thanks lo painl scrapings and archival rasearch. it's a wond8rful developmènl. In addition, th9 Sculpture Gallery was completely refurbished wlth new lighllng, decoration, displays and inlerpretalion, which was marked by a major exhibition A Fragmented Legacy.. G F Watts and Sculpture. The Iirsl In-depth exploration of G F Watts. sculptur81 piaclice, the exhibition provided a Compelling look at his creative practice and the way in which sculptural models and maquettes informed many of his mosl famous paintings. We are indebted to the Deborah Loeb Brice Foundation lor making th9 restoration of tho Sculpture G8118ry possible. Two olh@r major pr￿laMmeS also sat outside our annual roster of exhibitions, colledion displays, events and social irnpacl work. The firsl was a significant public consultation into G F Walls, sculptural masterpiece Physical Energy, ¢ompleted over 8 ten-monlh period by Morris Hargreaves Mclntyre and Covalent Creatives. Exploring public perG8Ptions in the UK and further 8fie1d through depth interviews with artists. academics and communities as well as staff. volunleeis, supporters and visitors and those who don't currently engage with the Gall8ry. The consullailc>n has provid8d vital context to the sculpture's complex history and a roadmap for Ihe insl8llation of Physical Energy onsite in 2024. Alistair Burtenshaw, Brlce Director & Chief Executive, Watts Gallery Trustee Page 4 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 OUR GUIDING PRINCIPLES Our Vislon: Art for All by All Our Mlsslon: From our beautiful and insp1ring setting of Watts Gallery Artists Vlllage, we welcome everyone lo connect with the art and ideas ol our founders George and Mary Walls. By caring lor the collections and our environtnènt, we advocate for the power, irnpact and rolevance of art - onsite, online, with our community and via our Internallonal network of ariists, sludio museum5. Our dynamic and mulli-sensory programme ol exploring. looking and making, lakes you out of the everyday. into new encounters that invite you to vlew life through 8 different lens. Our Values= Dynamism: We are an O￿anISation wilh artists 8nd crealivily 8t ils found8llon, driv&n by the Ir8nsformalive power of art. We are innovalive, forward-thinking and co118borative,- able to responcl to the challonges and opportunities ahe8d. We conlinuèlly aim forth& highest standards 8verylhing that we do,. whgth&r provi(ling a showcase for high quality art,. conlinual r8s&Brch and in-depth scholarship,. d81ivering innovative and exporimenlalprogrammes lo mèke and discovgr art 8nd craft,. or providirig dèlicious and exceptional customer Excelleneè.. Inttluslvlty.. Following in the foolsleps of our founders, Art for All ethos, we carè for and respect our local village community. as well as reaching out, addressing barKters, and gnsuring Ihal 9veryone feels welcome. r8specEed, represented and valued. We act 88 Ihoughlful, considerate, &ftd consistent custodians of our eslale and resources,. B place where art and nature Gomg together,. our environment is al th& he8rt of everylhing we do. Our exhibitions. research. and programmlng draw on Ihe coll8cl￿n, surroundings and story of th& Wallses lo explore and present dlverse n8rratives relevant lo all our lives in the Iw&nly-firsl century. We offer a warm welwme to 811 visitors ensuring that th6 commitment, pnlhusi8sm and en8rgy of staff Bnd volun19&rs delivers 8 lirsl-cla88 Vlsltor experience for everyone, 8very day. Responslblllty.. Relevan¢a: Welcome: Key Prlortties and Achievements Objective q Our AspiratSon: To connect wilh, touch and inspire our wider community defin8d as within a one-hour Ir8vel time. 1. Articulato an organisation-wide woikforce 51rategy and implement, monilor and revlew, as necessary lo ensure sl8ff, volunl881s and trustees reflect our wider communily, with training and facililles to enable Ihls. 2. Undertake further inveslm9nt In staff training and development. Extend CommLJnity Forum mambership, engagement, reflection and listening. What we have done this ear.. Commenced the development ol an organisation-wide workforce sliategy, Wlth the creation of a competency fram8work and salary spine lor all roles below the Senior Leadership Team's positions, which will in turn be revigwed and categorised in the coming year with Board input. Rolled out a volunteer charter with 98% of active volunteers having signed th8 charter. Continued the open recruitment ollruslses based on a skills auditwilh four appointments during Page 5 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 the year.. M8tt HDIt (Digilall, Ml¢haela Ma¢lntyre (Audience Developmenll, Cedric Ntumba (Treasurer) and Ulric Nebl@11-Le1gh (Leaming & Engaoementl. Open recruilmenl also commenced lor the posltion ol Chair of Trustees via S8xton Bampfylde ahead of the cowpletion ol MaryAnne Stevens, maximum term 8$ Chair al the end ol April 2023 and ol an Ari Historian Iruslee, following the impending conclusion ol Dr Malcolm Rogers, first term of office. Since year-end, Sarah King has been appointed Chalr ofTruslees as of29 May 2023,. Frances Rutter DL has been appointed as a Truslee as of 13 June 2023 and Chair of the Property Committee., Malt Holt has taken on the position of Chair of the Trading Company,. and Ulric Neblett-Leigh the rule of Safeguarding Lead. 2. Further Investment in staff training and d¥velopmenl has bè8n made through partiapalion1n the N811onal Portrait Gallery's National Skllls Sharing Partnership with Iwelve other c>rganisalions nationally whlch has included 8 slx month paid Collections & Learning Assistant position, form85 mentoring opportunities, 8kllls sharing, conferences and exchange opporiunities. In addition, a staff leadership training programme was Implemented for all line rnenagers with a first full day training session held to build line managetHènt skills with a further session held since ye8r-end. We Gonlinue to offer Fire Safèty and First Aid training across the organi53tion. A new Induction and Onboarding prO￿5S has boen implemented to support new starters. 3. Phase one of on organisalion-wide job evaluation project has been ¢ompleted. All roles below Senior Leadership Team ISLTI level have been graded and assigned a salary band. Salary adjusttnenis were made lo any roles that fell outside the agreed grade lo ensure fair, compgrable and transparent pay for staff. Phase two wlll include ex18rnal benchmarking and agreeing 8 process for pay piogression as well as reviewing 811 SLT ro18S. 4. A full benefits analysis and review has been undertakeri to amalgamate current benefits, introduce new ones and ensure all staff to have 8ecess lo a competStive benefits package. This has Included inlioducing a Celebration Day which has been very well received by stafF and increasing our paleinity pay above the stalutory minimum. We continuè to explore additional benefits Including Group Llle Assurancè. 5. The Community Forum, launched in the previous year, has ¢ontinued lo be developed with further metnbership recruitment, engagement, reflection and listening via four S8SSIDns, ranging from feedback on our Pre-Raphaelite TreasuTeS Èxhibition, what makes a warm welcome, topics around G F Watts and ernpire, the shaping of and feedback on our exhlbilion A Fr8gmsnted Legacy.. G F Watts & Sculptu￿, promotional ideas for summer foollall and brainslortning for the public programrlle, int8rprelalion approaches and naming for our ViGlori8n Virfval Reality exhibition and to test family interpTelalion and family welcome. What we lan to do next ear.. Ensure our woiklorce. leadership and governanc8 reflect our community. Creat8 access and carger opportunities for people from all parts ol society. 2. Establish current brand awareness within a one-hour travel lime lor 2023124 and set goal for 2Q24125 by commissioning an external perception study with a focu5 on the visibllity ol the stories of G F and Mary Watts as artists, the artists we showcase today, and the artist's village. 3. Raise brand awareness lo 30Qlo1210A wilhin 90 minul8s at Q2 20221 and track performance vla an extemal perception study, with a focus on the visibilily of the stories of G F and Mary Watts as artists. the artlsts we showcase today, and Ihe artists, village. Page 6 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 4. Recognise under-served communities and take action to develop and grow relationshlps with them including tightly focused partnershlp worklng with local and specific formal education settings and community groups. aligned lo audien¢e development objectives. 5. Enable young people lo a¢cess work experience, career support, training, and pald oppDrluniliBs in museums and galleries. 6. Embed Vision, Mission and Valu¢s Internally Istaff, volunleers, governan08 body). 7. Successfully eDnclude the board transition process Including Chair, Deputy Chalr and Commorcial Operations Trustee & Ghair of Trading Company. Objective 2- Our Actlvlty.. To &ngage all In dynamic Bnd creative programming 1. Define our ambitions in rese8reh, conseTvatlDn. digSt81 engagement, col18ctions management, outreach and learning and impletnenl effectively. monitoring and reviewing as required. 2. Create and embed an evaluatlon framework (annual programme. strategy. plan and monilorlngl. 3. Develop a skilled and divers8 workforce. in lil for purpose facilities linfraslruclurÈl'. ensuT8 that staff. volunteers and governance bodies reflect our wider community. 4. Ensure departmental collaboration lo develop the annual programme via the Strategic Programming Board and Exhibition Programme Project Teams lo enable co-working, sharing, mentoring, shadowing and cross-departmental workillg. What we have done this ear.. Museum Accredilalion was rè-secured Imm Arts Council England, an extensivè commitment and process which included th8 updating tsf sev8r81 key policies that define our approach to Sharing, conserving and developing our colleclior)s. 2. Whilst our application for renewed Arts Council England National Portfolio Funding was unsuccessful, a successful Transition Funding appli¢alion was made to provide eqkjlvalenl funding lor the first seven months of the subsequent year. 3. Significant work was undertaken by th8 Audience, Brand and Research SITatsgist lo devèlop and roll out an evaluation framework lo evidence Durwork, alongside plans to embed evaluation within team workloads and wider projecl framewoiks, ensuring evaluation is caplured in an appropriate and timely way. 4. Work ha5 Conlinued to ensure a skilled and diverse workforce, in fil for purpose facilities with work to improve the offices and inli8slruclur8 lor the Trading Gompany on the first floor ol the Cornpton Potters Arts Guild Building (the Pott8ry1. 5. Recruitment best practice has been extended by the People Advlsor lo ensure that staff, volunteers and governance bodies reflect our wider community. The People Advisor is now Iiacking Diversity and Incluslon data on all applicants acros5 811 roles to map th8 profile of our rectuitmenl and to use this data lo inforrn how we might make our recruitment pracllces mor8 inclusive. 6. WelcoTned artlst Habib Halallie as artist-in-resldence, coinciding with Faces of Fame.. G F Walts x Simon F￿d8rick, for a slx-monlh period of research and development. made possible by collaboration between Learning & Engagement and Collections & Exhibitions teams, and including monthly open studio events for our visltors. 7. Departmental collaboration has been extended through the development of the Strategic Prograrnming comtnittee, which meets monthly, chaired by the Director to develop the annual programme, a new monthly Practical Programming group to look at detailed programme developmenl and the development ol in19r-departTnenial workshops and sessions to ensure alignment across departments on stralegic programtning. 8. The Watts Contemporary Gallery develop8d a programme two years in advance lo 2025. As part ol this, we have already exhibited work by 64 living artists through the following exhlbitions.. Drawing Togelhgr lin partnership wllh membeTg of Ihe Society ol Graphic Fine Artl, C￿atIVe Page 7 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 Spaces (ln partnership with Llss Llewelynl, Figurg & Form.. sculptu￿ Now, Into Ihe Woods, In Prinl.- Kgleidoscopio èndA Sense ofPlaGg.' Tom VoyoE & GraGe Ellen. Whatwe lan lo do next ear.. l. Begin delivering our Collethons & Exhibitions ambllions Iof 2023-2028 and implement affeclively, monitoring and revleknring as rtrquiT8d wlth the newly reformalled Collections & Strategic Programming Committee. 2. Comple18 the Collections Onlin8 Programme (by Q3 20231. 3. Creale and embed a clear evaluation framework, Including the creation of an eva5u8tion loolkil and case study toolkit, that ensures we understand how all eletnenls of our work are perceived, use this tr) inform our work and to measure the success of our work as a continuous cycle and report annLJally lo board. 4. Design the selling for Physical Energy al Limnerslease alld $8eure all r818vanl planning onsenls (by end ol Q2 of 20231241 and complete inslall8llon Iby end ol Q3 of 20241251. 5. Scope and launch an open tender for the Physi¢al Energy Project Curator (Artistic Programme and Incluslve Inl8rprelalion Lead), supported by C(>valent Creatlves {by Q1 20231241. 6. Woik collaboraliv95y across departments from conception lo d8liv6ry and gnsure an ambitious annual site~wide seasonal public progr8mme up unli1 end of financial year 25126 that brings together historic collection, exhibitions, contemporary artist￿ practice and dynamic, tnulli- sensory and inclusive programming and inlerpretalion. 7. Ensure suff1ciènl Volunteer recruitment, training. and retention lo covei all stewarding needs. 8. Deliver the conservation and installation of the Well Head at Limnerslease wilh an activity plan that trngages new audiences by Q2 012023124. Oblective 3 - Our Buslness.. fo safeguard our future by attracting 100,000 visitors lo the gallery (by 2032), expand our income mix. and g8n&rate enough revenue lo match our ambitions, &veryye8r. 1. Review and further develop an environmentally sustainablg slte.wide infraslruclure maslerpl8n th81 lacililales access for 911,. supports 100,000 visitors and enables dynamic programming and sustainable in¢oTve generation. 2. Produc8 an oulline'cosled, phased Projocl Implementation Piogramme. largeled al supporting Income g8neralior), 8nvironmentsl suslainebllity, and fundraising opportunities. 3. Establish 8nd deliver a Fundraising Strategy (from oulllne, through d8tail and d6liveryl to seNe the phased Project ITnplemenlalion Programme. 4. Develop and implement a costed Marketing and Communi¢allon Strategy that addresses the Maslerplan Delivery Programme and the'Art for All by All, vlslon, carbon footprint reduction and environmental advocacy. 5. Establish a process lor departmental collaboration to develop bold and ambitious seasonal prograrnmlng togeth81. 6. Undertake programming as ils own dedicated income-generaling focu5 are8 le.g. Ikss8s, workshops, two Nn-house potters full time in potlèry for Gl&sses, rent81 Income from affordable mulliple artists, r85idenci8s in Limnerslease and 8lsewherel. 7. Enable growing Trading income.. regioup the various income slrearns into 'quick wins. and longer-term tasks,. planning and exeouting plan5 accordingly.. monitoring and ev8lualion lo ensuie prDfilabilily. 8. Enable growing Developrn8nt income.. regroup the various income streams into 'quick wins, and IDng8r-term tasks,. planning and execuling plans accordingly., monitoring and evaluation lo ensure profilability. 9. Renew major 8ndDwment carnpaign.. produced and delivered by the DevelopTnent department with dedlc8led ownership of th8 relationship with fund manager CCLA from Financ8 & Resources (overseen by the Financ8 Committee), to m8xlmise income. Page 8 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 What we have done this ear.. l. The Soulplure Gallery has been refurbished thanks to funding from the Deborah Loeb Brice Foundation, including redecoration, new lighting, a complete redispl8y Df Ihe collection. object inlerpretalion 8nd detailed information on the complex history of PhysiG81 Energy. 2. Trusteès identified four locations for the slting of our bronze cast ol Physl¢al Energy following public consultation. These w8re measured against the twelve success crilefia in the Iinal report by Morris Hargreaves Mclnlyre and Covalent Creatives ahead of the selection of a location in the Woodlands al Limnerslease and will conttlbute lo an ecologically sustainable development ol a signlficant poriion of the eslal8. LDA Design was appolnted as landscape architect lor the project in March 2023 and worked with the inleinal Project team lo begin the RIBA Stage 11 designs. The remaining work lo further develop an environmentally sustainable site-wide inlraslructure maslerplan is now scheduled for the 2023124 linanclal year. 3. An outline 'costed' phased Project Implemèntation Prograrnme largeled al supporting Income generation, environmèntal suslainabilily, and fundraising opportunilies wlll follow in the next year from the updating ol the Maslerplan. 4. Sinee year end, a new Fundraising Strategy has been drafted and will be updatéd lo ensure that it serves the phased project implemenlalion programme Ihal wlll follow from the Masterplan. S. The d8velopmenl and impletllentalion of a cosled Marketing and Communication Slrgtègy that addresses the Maslerplan Delivery Prograrnme and Ih8'Art forAII by All, vision, carbon fooiprinl reduction and environmental advocacy was hèld off as a consequence of the decision to delay th8 updating of Ihe Maslerplan and oxtensive ongoing work during the year on tho new websI1e, new Customer Relationship Management ICRMI syslern and deve1optnent of a new online and onsil8 licketing plafform. whi¢h will be completed in the subsequent year. The Markotlng team's work continues in the interim with a focus on the three key areas of brand awareness, income generation and audience development. 6. A new Board Collections and Prc>gramtlling commi118e was approved during the year for implementstitsn al the start of the subsequont year in addition to the further developmènt of pioctrsses for departmental ¢0118boralion lo develop bold and ambillous seasonal programming. 7. Developed and diversilied incotlltr opportuni11os across Lèarning & Engagement actlvity,. through paid school visits, new format family aclivilies, sale of Limner Collection products, and public events. Successfulty restored Public Pro9r8mme Curator post with focus on income generatin9 through tioketed activities.. these include rtsinstaling popular pott8ry workshops, a new 'Wellbeing al Walls, event strand, talks, gvening evonls and music performances. A new ev¢nt on sal8 process has been Implemented tD establish seasonal programmes and drive income. 8. Trading Company sales were 12Dk above the prior year's figures and 2300A above the pandemic yearfs Iigures from 2020121. The Trading Company net profil for the yeaT 2022123 was 38% below the 2021122 figure due lo the doubl8 effect of a drop in soles and significant ses in costs such as Utilities. 9. The development leatn exceeded its largel by 9%, ralsing £1,177,388 agalnsl a target ol £1,076,924. 10. As part of a renewed major endowment campalgn. a lo181 of £154,514 was r8c85ved Irorn two legators. What we lan to do next ear.. Organisalional suslainabillty plan lo be ena¢18d for the 2023124 re¢overy period and rolled out across all departments. 2. Organisation-wide locus on cotllplating roll out ol CuslomeT Relationship Managemonl- Ticke￿ng inlegratlon and maxlmising all benefits from the system together with 8 eross- Page 9 Watts Gallery Trust Report of the Trustee5 for the Year Ended 31 March 2023 organisalional focus on ¢realing any updated Complian￿ and business conlinuily frameworks that may be required including safely. GDPR and safeguarding. 3. Organisation-wide locus on ¢￿aling a major venue-hire and filming income stream. 4. Generate significant new income streams from Leaming & Engagement Ipublic Programme, participation fees, fundraisinglsponsorsh1p model lo cover participation fees foT SUPPOrted groups, rll4ximising use of the Foyle Pottery Studio and Clore Le8ining Studio, etc.). S. Generate significant new income streams from Collections and Exhibitions Ilouring exhibitions. loan fees. publications, image licensing, elc.). 6. Appoint a dedicated procurement lead within the orgonisalion lo achieve a minimurn of £20,000 in savings In 2023124, an updated procurement policy and a r8v1ew of our twenty biggest Trust and Tradlng suppliers together with a lirnellne lo lendEr their contracts. 7. Ensure strong baseliné monthly data lor all ulillties and appoint a green energy broker lo review all utilities and sign new green agreements focused on environmental suslain8bility, cost and quality. 8. ComplÈte a quinquennial survey of the eslatg in Q1 of 2023124 and implefnent live-year recommendations in a phased approach. 9. Develop a long-lerm strategy to achieve subslanllal growth in membership numb8rs and income. 10. Embed and extend Ihelggacy campaign lo increase the return from our investment income. 11. Maximise investment in¢ome via regular reviews with Investment fund managers CCLA and strong relationship led by the Head of Finance & Resources and overseen by the Finance Committee. 12. Agr8e and roll out near-lerm options to lurther grow Tradlng Company prolilability given inflationary cosl pressures via a posl-pandemic Trading Cornpany Strategy that focu585 on the evolution ol our current core Trading Company a¢livities of catering, rel8il and conletllporary rt sales with new orowlh areas ol venue hire, filming, licensing and other opportunitie5, Objectiv& 4 . Our Audlence Focus: To enabl8 all to enjoy WBtls Gallery by listening and resptsnding lo the needs of all users 1. Seek external perceptions of our organisalion and Dur work. 2. Deflne and describe the whole sile offer more effectively and deliver vla new website. What we have done this ear.. External perceptions ol our or9anisation and ourworkwere sought as part of Ihe wider research project, run jolnlly by Morris Hargreaves Melnlyre and Covalent Creatives to inform the siting of Physical Energy, consulting with supporters, visitors, non-visilors, artists and atrademic5. 2. Further development of th8 Communlty ForuTll, which Is tnade up ol a diverse range of visltr)rs and non-visilors in OLJr comwunity with three new membeT3 reeruiled. 3. The Gallery commlssloned Beyond th6 Waves. a major video Installatlon rgsponse lo the sculpture of G F Watts created in coll8boralion with SlopGap Dancg, Disability Arts in Surrey IDAISYI, choreographod by Chiis Pavia and directed by Roswilha ChesheF, which wa5 shown In Ihe Showcase Gallery alongside the exhibition A Fr8gment6d Legacy.. G F W8tts and Sculplure. 4. PartScipated in Art FurKI's national Wild Escape project., engaging children from our nearest primary schools in discussions and activities exploring the wildlife and nature at Watts Gallèry Artists, Village. to conneGI lo the national conversation. 5. Work commenced on defining and describing more effectively a whole site offer whlch inlormod the design and conl8nt ol a completely new websit8, built by Supercool followlng a malor tender process, as well promoung the day out offer acr055 various channels. Page 10 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 What we lan lo do next ear.. Extend understanding across the organisalion of curr8nl and futur8 visitors within a one-hour travel lime. 2. Increase the Net Promoter Score lo 85% Icurrenlly 840k with 1% delra¢torsl. 3. Understand and grow dlgital audience engagement and income wherever possible. 4. Extend, deep8n and further embed Community Forum memb8rship, engagement, iefleclion and li51ening', 8nSLJre that recommendalions and their implementation. whero appropri8te, are aclioned In a Iit1181y fashion. 5. Seek external perceptSons of our organisation and our WOTk. 6. Visitor Experlence findings lo be reviewed and embedded ill a new Vlsilor Experienea Strategy thal enables the 'wholé site off8r' to be defined and described more effèctively vla roll-out of the visltor experience findings. including new site signage aligned to the InslallalSor) ol Physical Energy in the Limnerslease orounds. As we reftecl on all that has been achieved in such a challenging clima18 and our ambitions for the future, the Dlreclor, Chair and Injstees would like lo reilerale thèir thanks lo the stsff, volunteers and supporters who make als the organisalion's work possible. Page 11 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 Structure and Governance struclure Watts Gallery Trust was 8slablished and registered as a charity in 1905. In 2008 il was incorporated as a cotnpany limited by guaianlee. Walls Gallery Trading Llmited is a Iradlng subsidiary wholly owned by Walls Gallery Trust. The company is controlled by its governino document and a deed of Twst and constitutes 8 Company, limi18d by guarantee, as defined by the Companies A¢1 2006. Watts Gallery TrLJSt charitable objects as s81 out in the Memorandum and Articl8 of Association are.. To promolts art for the benefit of Ihe public by th8 eslablishm8nl and maintenance of the Watts Art Gallery To 8dvance the education of the publi¢ In the Subject of art. To presorve for the ben8fil ol the public the Watts Art Gallery, its grounds and other bulldlngs associated wilh George Frèderic and Mary Walls as buildlngs of histori¢ architectu181 or conslruclional interest, Thes8 are the objects as updated during the y8ar and adopted by the Board of Direth)rslTruslees on 25 May 2022. The Trust is governed by a board of Trusteès who are also directors of the Company. The trustees meet al least four limes 8 year and are Tespon5ible for the objectives and the strategy for the Charity and are in ovtsr811 contrDI ol its management and adminislr8lion. Certain rnanagement and essentially all operational functlons are delegated lo the Dlroctor and Senior Leadership Team. Publlc Benefil We have sel out in thls report the tnain activities undertaken by the organizalion in order lo carry out the charitls aims for the public benelil as sel out in ils Memorandum. In doing so, we have had due regard to the public benefit guidance by the Charity Commisslon. Trustees The Trustees are recruited so that there is a balance of skllls. qualilicalions and experience available lo ensure that the TTUSI and ils Properly are managed efficiently and knowledge8bly. All new Trustees arg glven a full induction Including a copy of the Charity Commisslon booklet, 'The Essential Trustee,, on the responsibillties of a Trustee and a file of 8ssenlial infomation includlng policies and procedures. Each new Trustee is appointed lor an initial 18rm of four years and may then be re*lecte(J for further periods of four years. Trustees rotale and the Chair is appolnted al the first meeting in each financlal year. Followlng the govgrn8nce review concluded by Cause 4 in Sprlng 2021, new Articl&s were adop18d and Iiuslee recruilmenl reviewed. All trustees are now recruited based on specifi¢ skills, via open recwitmenl, based on interview with a view lo b88t represent OUT community and the range of skills and experignce required. All trustees complete an annual related party transaction form in addition to Ihe declaration of inleresls taken at 8very trustee m8gting. On 28 September 2023. new Articles wer8 approved and adopted lo allow Truslees lo serve for a more suiIBble period ol tlme than was previously allowed under the original Articles. Page 12 Walts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 Remuneration Pollcy Watts Gallery Trust is committed lo paying staff a fair salary that is comp8titive within similar sized organisatlons in th8 charitable arts sector locally and which is proportionate lo Ihe cornplexity and responsibilities of each role. RemLJnerallon levels aye linked lo a regular and objective systerTI of performance appraisal and are benchmarked agaSnsl comparable lo¢al roles. The Trusl8e5, Wlth recomm8ndalions from the Finance and Buildings Committee, approve any annual percentage incrèase lor slaff. When d8lermining salaries under normal conditions, the Trusle8s lake account of a numbar of factors including whether the proposed salaries are Èffordable within planned budgets, the need to relain suitably qualifi8d and experienced staff and the relative responsibili11gs of each post. The Director of Walls Gallery Trust is also a Trustee. Thè Director is eligible for a bonu5, which is delarmined by an ass85smenl of perfomiance and achievement of delivery larg81s carried out by the Choir and DepLJly Chair ol the Trusle8s. This is ￿vieWed end confirmed by the Finance and Building Corntllitlee. It is our protocol that all Iruslees expenses be approved by the Chalr of the Trustees prior to processlng and payment by thè charity, however a pollcy will be brought lo the Board for eonsideralion during the 2024 financial year. Invastmenf Pollcy Walls Gallery Trust seeks to produ¢e the best financia5 return commen5urale with an acceptable level of iisk. The inv8Strnenl objective lor the reserves Is to generate a return in excess of inflation over the long term whi1s198neraling an annu81 income lo support the ongoing activities ol Watts Gallery- Artist Villag8. Invesltn9rit management is undertaken by CCLA on a total return basis and the performance ol the portfolio is regularly reviewed by the Finance and Buildings Committee. The Iruslees in apwinting CCLA considered Ih8ir ESG cr8denlials. CCLA hold an A+ rating across all principles for responsible investment. Investment income lorthe yearwas £183.216, a decrease on the prèvious year1202112022'. £226,894) and this rernain5 3 valuable source ol unrestric18d income. Risk Management The Trustees have considered the major iisks lo which the CharSty is exposed and have reviewed Ihose systems and proG8dures lo manage thos8 risks. The major risks to the Ch8rity includts a sustained drop in admissions numb8rs. governmenl policie5, staff and volunteer attraction and relenlion, reliance on fundraising income and risks associated with systems and processes. The risk rggisler is revi8wed regulady by the Director and Senior Leadership Team, quarterly by the Fin8nee and Buildings Committee and annually by the Trustee Board. The Trustees b811eve the Charlty has sufficlenl resoureES lo continue operating for the foreseeable future. Financial Review The total incom8 lor the year was £2,562,395 compared lo £2,660,246 In Ihe pr8vlous year. Income less expenditure excluding depreciation and investment losses dropped by 11 % 10 £31 S,881 12022.. £356,003>. Ther8 Was a 5ignifl¢ant loss on revaluation of the Investrnent assets of £246,91312022'. £183,839 gain) and depreciation increased to £272,126 12022,, £229,322) which contributed to the deficit in riel movement in funds of £834,92012022.. £401.4651. The fall in income is associated with loss ol furiding from Surr6y County Council and Arts Council funding though these were p8rtially offset by general donations increases and gilvtea shop aclivily. Page 13 Watts Gallery Trust Report of the Trustees for the Year Ended 31 March 2023 The princip81 fundlng sources for the year in¢luded Donations of £1,177,388 12022.. £1,317,761). Trading Activities of £1,129,919 12022.. £1,008,523) and Investmenl 1ncome of £255,088 12022.. £285,652>. Gift Aid recov8red during the year was £85,24512022.' £42.9261 as detailed in note 2. Day lo day operations of the Gallery ar8 accounted for wllhin the unreslrlcied fund. Nel expenditure wilhln the unrestricted fund 011205,400 compared to the nel income seen last year of £332.084. The Income and related expenditure on capital prolecis is raised and recognised within the reslricled funds, A delicil of £395,386 on the restricted funds occtjrred in the year due to costs b8ing recognised on projects lor which the In¢ome was secured and recognlsed in prior yeais. Watts Gallery Trading Limitgd, a subsidiary of Watts Gallery Trust. donated £61,717 to the Charity {£80,904 in 20221. Th& Charily will ¢ontinue lo pursue the strategy of diversifying ils income streams and hence less relian¢6 on fundraising income. ReseTV•S The Diie¢tors' Policy Is lo aim lo build up uncommitted reseNes to a level equivalent lo 3 6 months CUTrenl runnlng costs1£719,569 2023, £754,130- 20221 This is in order lo safeguard and underwrite Walts Gallery's continuing aolivities and meet ils contractual obligaiions in the event of a redudlon in income. Watts Gallery Trust holds three categories of funds., restricted funds which are donations received by th8 Gharity where the purpose lor which they can ba used is determined by the donor (Sèe note 221 and endowment funds which are either expendable or permanent, While the permanent endowments consist mainly of the value ol the permanent collection of art works, the expendable endowments ale used primarily lo gener8le further income to support the Gallery's costs. As al 31 March 2023 Watts Gallery Trust had consolidated lolal funds of £38,873,682 12022.. £39,708,602) ol which £1.477,071 were unrfjslricted funds, £9,213.870 were reslricled funds and £28,182,741 held in endowments (which includes the collection valued al £22,790,776). The unreslricled funds are made up of £1,219.834 in freehold land, buildings and tangible assets and £310,570 of Ire& reserves12022.. £959,185). This level of free reserve represents approximately four months current opgrallng ¢c>sts. The chaTitywill. as a maller of urgency. consider a drawdown of some funds from its inveslrn8nt porttDIio lo cover the shortfall in unrestricted funds whil8 pursuing other strategies lo grow its incorne. PaEe 14 Watts Gallery Trust statement of Trustees, Responsibilities The trustees Iwho are also directors of Watts Gallery Trust lor the purposes ol company lawl arè responsible for preparing the Trustees. Annual Report lincluding the Strategie Report) and the financia5 statéments in accordance with applicable law and Unitèd Kingdom Accounlino Standards (United Kingdom Generally Accepted Accounting Pra¢llcel. Company law requires the tiusloes to prepare financial statements for each financial yg8r, whlch give a true and lalr view ol the state of affairs of the charitable company and ol the incoming resources and application ol resources, including the income and expenditure, of the charitable company for thal period. In preparin9 these financial statements, the trustees are required lo.. select sultable accounting policies and then apply Ihern collsi5tenlly', obs8tve Ihe methods and principles in the Chgrili8s SORP 2019 IFRS 1021.. make judgements and eslim8les Ihat are reasonable and prudent.. state whether applicable UK A¢¢ounling Standards have been followed. subj8cI lo any matorlal departures disclos9d and explained in Ihe financial slalemenls., prepare the financial slalements on the going concern basls unless it is inapproprlale lo presume that the charitable company will ¢onlinug in operalion. The Irusle8s are responsibl8 for keeping adequate accounting records that disclose with reasoriable accijracy al any time the financial positTon of the charitable company and enable them lo ensure th81 the financial slalemenls Comply wllh the Companies Act 2006. They are also rosponsible for safeguarding th8 assets of the charitable company and hence for taking reasonable steps for the PT8venlion a￿d detection of fraud and other irregul81ities. In so far as the Iruslees are aware: there is no ielevanl audit InformaliDn of which the charitable company's auditor is unaware.. and the Iruslees have taken all steps that they ought lo have taken to make themselves aware of any relevant audit information and lo &stabllsh that the audltor is aware of that information. Approved by the trustees of the charity on and signed on ils behalf by.. A 8urtenshaw Trusl8è S King Trustee Page 15 Watts Gallery Trust Independent Auditor's Report to the Members of Watts Gallery Trust Opinion We have audited Ihts lingncial slalements of Watts Gallery Trust Ilhe'charilable parent company,) and its subsidiary Ilhe 'group'l for Ihe ye8r ended 31 March 2023, which comprise the Consolidated statement of Financial Activities, Consolidated Balance Sheet. Balance Sheet, Consolidated Statement ol Cash Flows and Notes to the Financial Sletemenls, including a summary of sSgnilicanl accounling po1i¢ies. The financial reportlng framework th81 has been applied in Ihèlr preparation is United Kingdom Accounting Slanddrds, including Charities SORP FRS 102 'The Financial Reporting standard applicable in the UK and Republic of Ireland., and applicable law Iuniled Kingdom Generally Accepted Accounting Praclicel. In our opinion the financial statements: glve a true and fair view of the stal8 ol the group's and charitable parent compar)Is affairs a5 8t 31 March 2023 2nd of its incoming resources and application ol resources, including its income and expenditure, foT the year Ih6n ended., have been properly PT8pared in accordance with Unlted Klngdom Generally Accepted Accounllng Practice,. and have been prepar8d in accordance wlh the requirements of the Companies Act 2006. Basis for oplnion We conducted our audit in a¢cordance with International Standards on Audlting {UKI IISAS IUKII and applicable Saw. Our responsibilities tjnder those standards are furth8r described in the Auditor's responsibilities for the audit of the financial statements section ol our report. We are independent of the group in accordance with th6 ethical ￿qUIrementS that are relevant to our audit of the financial Statements In the UK, including the FRC'S Ethical Standard. and wo have luifilled our other ethical responsibilities in 8wordance wth these Tequiremenls. We believ8 Ihal the audit evidence we have oblalned is sufficient and appropriate lo provide a basis lor our opinion. Concluslons rÈlatlng to golng concern We have nothing to report in respect of Ihe followlng mallers in relation to which the ISAS IUKI Tequire us lo report to you whère.. the Iruslees use ol the going concorn basis ol accounting in the preparation of the f1nandal statements Is nol appropriate., or Ihe Iruslees have not dlsclosed in the financial statements any identili8d material uncertainties that may cast significant doubl about the grokJp'8 ability lo conlinu8 to adopt the going con¢ern basis ol accounting for a period of al least iw81ve months from th& dale when the financial statements are atjlhorised lor issue. Other informatlon The Iruslee5 are responsible tor the other information. The other infoim8tion comprises th8 Information Snduded In the annual report, olher than the financi31 slalemenls and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except lo th8 èxtent otherwi80 explicitly slated in our report, we do not express any form ol assuran¢o Conclusion Ihereon. Page 16 Watts Gallery Trust Independent Auditor's Report to the Members of Watts Gallery Trust In connection with our audit ol the financial slal¥menls. our r8spDnsibilily is to read the other infoitnatlon and. in doing so, consider whether the other information is materially inconslslent wilh the financial statements or our knowledge obtained in the audit or otherwise appears lo bg materially misstated. If we identify such material inconslstencies or apparent material mis51at8menls. we are required to determine whether there is 8 material missialement in the financial slalements or a material mlsstatemelll ol the other information. 11. based on the work we have performed, we conclude that there is a material misstatement of this olheT information. we are required ID report that fact. We have nothing lo report in Ihls regard. Opinion on other matters pres¢rlbed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit.. the information given in the Trustees, Report for th¢ financial yèar lor which the financial statements are prepared is consistent with the finanolal statements., and the Trustees, Report have b88n prepared in accordance wlh applicablè legal reguiremenls. Matters on which wo are requlred to report by exceptlon In the Ilghl of our knowledge and understanding ul the gr(>up and the charitable parent company and ils environment obtained in the eourse of the audit, wg have not id8ntilied Tnalerial misslat8ments in the Trustees, Report. We hav6 nothing to report in r8specl of the following m8llers where thè Cornpanies Act 2006 requires us to report lo you if, in OUT opinion.. adequa18 and sufficiènt accounting records have not be8n kept by the eharilable parent company, or T8turns adequate for our 8udit have not been receiv8d from branches not vislled by us.. or the charitab18 parent company financial slalemenls 8re not in agreement with the accounlino records and returns., or certain disclosures ol Iruslees remuneration specified by law are not made,. or W8 have not re¢elved all the infomialion and explanations we requlre for our audlt. Responslbilitie5 of trustees As explained more lully in th8 Statement of Trusle&s' Responslbilllies Isel out on page 15), the Iruslees are responsible lor th8 preparation of the financlal slalemenls and for belng satisfied that they give a true and fair view. and for such Internal control as the trustees delerrHine is nectsssary to enable the preparation ol financial slatoments that are free from material mlsstalemenl, whether due lo fraud or 8rror. In preparing tho finanaal s18tements. Iho trustees ar8 responsible lor asse851no the group's and the charitable p8renl company's ability lo continue as a going concern, discloslng, as applicable, matters related lo gc>ing concern and using the going concern basis of accounting unless the Iruslees either intend to liquidatè the group or the ch81itable parent company or to cease operats'ons, or have no realistic allernalive bul lo do so. Page 17 Watts Gallery Trust Independent Auditor's Report to the Members of Watts Gallery Trust Auditor's respon$SbllStles for thè audit of the financial statements Our objectives are to obtain reasonable a55uiance about whether the financial statements as a wholo are free from material misstalemenl, whether due lo fiaud or error, and lo issue an auditor's report that includes our opinion. Reasonable assurance is 8 high level of assurance, bLJI is not a guarantee Ihal an audit conduGled in accordan¢e with ISAS IUKI will always delecl a material misslatemenl when it exists. Misstalemenls can arlse from fiaud or error and are considered rnalerial il, Individually or in the aggregatè, they could reasonably be expected lo inllLJence the economic de¢isSons ol users taken on the basis of these financial slalemenls. Irregularilles, including fr8LJd, are instances of non-compliance w((h laws and regulations. We design procedures inline with our responsibi1ilies, oufjined above, lo detect Tnalerial misslalgments in resp8ct of Irregula￿11es, including fraud. The extent lo whlch our procedures are capable of detecllng irregularities. including fraud is detailed below.. Based on our understanding of the charitable parent company and industry, we identified that the physical Tisk of non-compliance wilh18ws and regulations related to breaches of health and safety and employee laws and regulations. We also obtained an understanding ol the legal 8t)d regulatory frameworks that the charitab18 parent company operates in, focusing on those that had a direcl effèct on material figures and disclosures in the financi31 statements. the main regulations considered in this context included the UK CompaniBS Act 2006 and the Charities Act 2011. We gvalualéd the incenliv8s and opportunities for fraud in Ihg financial slalements, including, but not limited to, the risk ol override ol controls and designed procedures in response to these risks as follows., enquirlng of managemènt concerning actual and potential litigatlon and clalms., P8rforming analytical procedures to identify any unusual or unexpected relalionshlps that may indicate risks of material misstatement due to fraud-, testing the appropri8leness ol journal entries and other adjustments., assessing whelhar the judgements made in making accounting esliTnalos are indicativè of a potential bias, and; evaluating the business rationale of any significant transactions that are unusual or otjtside the normal course of business. We 8150 communioaled relevant identified laws and regulations and potential fraud Ilsks to all engagement 18am members and remained alert tri any indications of fraud or nDn-compllance with laws and regulations throughout thè audit. Ther8 are inherent IlmStation8 in the Audit procedures describ8d above, and the risk ol not detecting a material misslalement due lo fraud is higher than one resulting from err(>r as fraudulent misgtalements may involv0 deliberate concealment. A further description Df our rèsponsibilities for Ihe audit of Ihe financial slalements1s located on thè Financial Reporting Council's webs118 at www.ftC.OTg.uklauditorsrespDnslbi11118s. This doscrlplion forms part of our auditor's report. Page 18 Watts Gallery Trust Independent Auditor's Report to the Members of Watts Gallery Trust Usè of our report This report is made solely lo the charitable parent company's Irustees, as a body, in acoord8nce with Chapter 3 of Part 16 01 Ihe companies Act 2006. Our audit work has been und8rtaken so that we might slate to the group's Iruslees those mallers we are required lo state lo them in an audltc>rfs report and for no other purpos8. To the lullesl extent pertnitled by law, we do not accept or assume responsibility lo anyone other than the chaiitable parent company and ils Iruslees as a body, for our audil work, lor this report, or for Ihe opinions we have formed. Debra Saunders FCA, Bsc (Honsl (Senior Statutory Auditor) For and on behaw of Azèts Audit Services Limited, Statutory Auditor Ashcombe Court Woolsack Way God81ming Surrey GU7 1LQ 22 November 2023 Dale.. Page 19 Watts Gallery Trust Consolldated Statement of Financial Activities for the Year Ended 31 March 2023 {Including Consolidatod Income and Expendlture Account) Unrestricted Restrictèd funds funds Endowrnènt funds Total 2023 Total 2022 Not& Income and Endowmonts from= Donations Trading activities Investm8nt income Olher incom8 977.388 1.129,919 246.470 200,000 1,177,388 1,129,919 255,088 1.317,761 1,008,523 285.652 48,310 8,618 Total Income 2 353.777 200.000 8,618 2,562,395 2,660,246 Expèndlture on.. Raising funds 8nd trading costs Charitable activities 1976,1001 1909,T261 12,174,302) 12,335,843) 1976,1001 7 11.583,0771 1591,2251 Total expenditure Not incomellexpèndilurel before gainslllossesl on investmenl assets Gainslllc>ssesl on investment assets 2559,177 591,225 3.150 402 3.245,571 205.400 391.225 8,618 588,007 585,325 210.197 246,913 183,839 Nel incomelloxpenditure} other recogni58d gains and losses Other gainsllosses Net movement in funds 205.400 427,941 201,579 834,920 21 205,400 427,941 201,579 834,920 401,465 Reconclllatlon of funds Total funds brought forward 1.682.471 9,641.811 28,384,320 39,708,602 40 110,067 Total funds carried forward 22 1,477 071 9 213,870 28 182.741 38,873,682 39 708,602 Page 20 Watts Gallery Trust Consolidated Statement of FSnan¢ial Activities for the Year Ended 31 March 2022 (Including Consolidated Income and Expenditure Account} Unrestricted Restricted Endowmertt Tol81 funds funds funds 2022 Totsl 2021 Note Income and Endowments from.. Donations Trading activilies Investment inootne Other income 1.251.056 1,008,523 274,979 48,310 15,557 51,148 1,317,761 1.008,523 285,652 48.310 1,932,375 345,471 301,346 371,501 10,673 Total income 2,582,868 15,557 61,821 2.660,246 2.950,693 Expenditure on: Raising funds and trading Gosls Charitabl8 aclivilies 1909.7281 12,005,224) 1909,7281 1656,8781 12,335,843) 12,224,270) 1330,619) Total expenditure Net incomelloxpendilurel before 9ainslllossesl on investment assets Gainslllossesl on investment assets 2 914.952 330,619 3.245 571 2,881,148 332,084 315,062 585.325 27,337 156,502 183,839 721,317 Nel incomellexpendilurel other recognlsed gains and losses Other gainsllosses N&1 movement In funds 332,084 287,725 218,323 401,486 790 862 21 21 332.063 287,725 218 323 401.465 822.609 Reconciliation of funds Total funds brought forward Total funds carried forward 22 2.014.534 9.929,536 28,165,997 40,110 067 39,287.458 39,708,602 40,110.067 1,682,471 9,641,811 28,384,320 All of the group's aclivilies derlv& from continuing operations during th8 above two periods. The funds breakdown for 2023 and 2022 are shown in note 22. Page 21 Watts Gallery Trust (Reglstration number: 06147572) Consolidated Balance Sheet as at 31 March 2023 2023 2022 Note Fixed assets Tangible assels- Land and buildings Tangible assets- Plant and equipment Heritage assets - Collection Inveslmpnt properties Listed investments 13 13 14 15 15 7,448,153 342,300 22,765,564 763,840 6,278,075 37,597 932 7,586,951 286,723 22,765,564 763,840 6.524,988 37,928,066 Current 8S58t5 Stocks Debtors Cash- restricted Cash - unrestricted 104.499 131.801 1,202,814 284 033 1,723,147 95,563 234,675 924,006 958,491 2,212,735 16 Creditors: Amoun15 falllng due wlthln one year 257,264 222.066 Net currant assets 1465,883 1,990669 Total assèts lèss current Ilabllltles 39.063 815 39,918,735 Creditors: Amounts falling due after more than one year 18 190,133 210,133 Net assets 23 38,873,682 39,708,602 Funds of the group: Endowment funds 28 182,741 28.384.320 Rèstrlcted fund$ 9,213,870 9641,811 Unrestrlcted Income funds General funds 1,477,071 1,682,471 Total unrestricted funds 1.477,071 1682,471 Total funds 22 38,873,682 39,708,602 Th￿'nancI I stalemenls on pages 20 10 54 were approved by the tiuslees and aulhorised lor issue on A Burtenshaw Truslg8 S Klng Truslee Page 22 Watts Gallery Trust (Registration number: 061475721 Balance Sheet as at 31 March 2023 2023 2022 Note Fixed assets Tangible as58ts- Land and buildings Tangible assets - Plant and equiprnenl Heritage assgls- Collection Investment properties Shares in group undertakings and participating Inler8Sts Llsled investments 7,448,153 278.241 22,765,564 763,840 7,586,951 208,234 22,765.564 763,840 13 14 15 6 278,075 37,533,874 6,524 988 37,849,578 Current assets Debiors Cash - restricted Cash- unrestricted 16 260,156 1.202.814 192,879 1,655.849 364,514 924,006 845.926 2.134,446 Credltors.. Amounts falllng due wlthln onè yèar 17 179,242 138,623 Net currènt assets 1,476,607 1995,823 Total assets less current liabllltlès 39,010,481 39,845.401 Creditors.. Amounts falllng due after more than one year 18 136,800 136.800 Nèt assets 23 38 873.681 39,708,601 Funds of the charlty: Endowmènt funds 26,182,741 28,384,320 Rèstrlcted fund5 9 2fj3 870 9,641,811 Unrestricted Income funds General funds 1.477 070 1682,470 Total unrgstricted funds 1,477.070 1682.470 Total funds 22 38,873,681 39,708.601 Th8 linanci I slaletnents on pages 20 to 54 were approved by the trusl89s and authorised lor i5sug ori and signed on Ih8Ir behalf by.. A Burtenshaw Trustee S King Trustee Page 23 Watts Gallery Trust Consolidated Statement of Cash Flows for the Year Ended 31 March 2023 2022 2023 Note Cash flows from opèrating 8Ctlvlties Net cash incomel{expendilurel Adjustments to cash flows from non-cash ilems Depreciation Investment income (Gainllloss on inveslmenls (834,9201 1401,4651 272, 126 1255,0881 246,913 570,969 229,322 1285,6521 188,885 646,680 15 Working capital adjustments Ilncreaselldecrease stDcks {Increaseyd8crease in d8btors Increaselldecreasel in creditors Ng1 cash flows from operating activities Cash flows from Investlng actlvltles Intere51 ￿CeIVable and similar income Purchase ol tangible fixed assets Purchase of inveslmenl$ S818 of invgStm¢nts Income frorn fixed asset investments {8,9361 102,875 35,198 8.227 7,487 43,509 16 17 441,832 674.475 2,682 1188.9061 456 122,2921 16,586.3681 6,433,289 285.194 13 15 15 252,406 Nel cash flows from invesllng activities 66,182 110,281 Cash flows from financing acllvities Repayment of bank loans Nel cash flows from investing activities Net Idecr8aseyincrease in cash and cash ÈqLJivalenls Cash and cash trquivalenls at 1 April 2022 Cash and cash equivalents al 31 March 2023 18 {20,0001 16,6671 20,000 6,667 1395,6501 1570,8611 2.453,357 1882.497 fj,486,847 1,882,496 All of the cash flows are derlved from continuing operations during the above two periods. Page 24 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accounting policies Summary of signifi¢ant accounting policles and key accounting estimates The principal accounting policie5 applied in the preparation of these financial Statements are set out below. These policies hav8 been consistently applied to all the year5 presented, unless otherwise staled. Statement of compliance Watts Gallery Trust Is a cc>mpany IlmSted by gu3rantee, incorporated in England. Th8 reglslored office Is Watts Gallery Trust. Down Lane, Compton, Guildford, Surrey. GU3 1 DQ. The nature of the charills operations is sèl out in thè Report by the Trustees. The financial slalèm6nls hav8 been prepar8d in accordance with Ac¢oLJnling and R@pDrting by Charities.. Statement of Recommended Praclico applicable to charities preparing Iheir accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland issued in Oclober 2019. the Financial Reporting Standard applicoble in the UK and Republic ol Ireland IFRS 1021, the Charities Act 2011 and the Cotnpanies A¢1 2006. Bas15 of praparatS0 Watts Gallery Trust meeis the definlllon of a public benefit enlty under FRS 102. Assets and Ilabilities are initially recognised al historlcal cost or transaction value unless olhtsrwise slated In the relevant accounting policy notes. Basis of consolidation The consolidated financial slalements consolldale the financial slalemenls of Ihe chadty and ils subsidiary undertaking drawn up to 31 March 2023. No S18temenl of Financial Aclivili8s is presenlod for the charlty as permilled by section 408 of the Gompanies Act 2006. For the financial year endino 31 March 2023 the chaiity generated a deficit of £205.394 {2022 - deficit of £332.0631 on unreslricled funds related lo the Gallery's operating activitles and a deficit 01 £627,527 12022 - d8ficil of £69,402) on restricted and endowment funds related lo spocific projects or purposes. This results in a nel def5fyt of £834,921 for the financial year12022 deficit of £401,465). A subsidlary is an entity controlled by the charity. Control is a¢hleved where tho charity has the PDwer lo goveTn the financial and oper8llng policies of an enlily so as to obtain benefits from its activities. Inter-cornpany Iransaclions, balances and unrealised gains on transactions belwgen the company and ils subsidlary, which arè related parties, are elimlnated in full. Inlra-group losses are also eliminated but may indicate an impairment that Tequires recognition in the consolldated financlal stalernents. Accounting policies of the subsldiary have been changed wher8 necessary lo ensure conslslency with the poliaes adop18d by the group. Page 25 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accounling policias {Continued Going concern At the time ol approving the financial stalemenls, the trustees have 8 reasonab18 expectation Ihal the group has adequale r850urces to continue in operallonal exlsleDce for the foreseeable future. The Iruslees consider that there are no material uncertainties about the group's ability lo wntinue as 8 going concem nor any sSgnificanl areas of uncertaSnty that affèct the carying value of assets held by the gTOLJP. Income and endowments All incotlle is recognised once the Group has entitlement to the income, il is probable that the income will be recèived and the amount ol Ihe income ￿CeIVable Can be measurèd reliably. Dcjnated goods are recognlsed as in¢ome. provided the abov8 conditions are mel, al th&ir eslimaled fair valuo. Voluntary donations are recognised in the period in which they are received. In¢ome from Iradlng activities is measuTed at the fair value ol the ¢onsideralioN rèceived or receivable, èxcluding discounts. r8bales, value 8dded tax and other sales taxas. The point of recognition is Dn the dale that goods are provided lo customers or the period over which servlces are provlded. Investmenl income is recognised based on the dale the group is ent111ed to the income. Grants recelvable Government grants are recognised al the lair value of the asset rgceivÈd or receivable when thère is reasonable assurance th81 the grant condltlons will bo mel and the grènls will be received. Goveinm@nl grants are recognis8d in the comparative period in relallon lo the Coronavirus Job Relenlion Scheme and other Council grants. A grant that specifips performance conditions Is recognis8d in income when the p8rformBnce condS1Sons ar8 met. Whero a grant d085 nol specify performancè conditions it is recogni5ed in incotne when the proceeds ar8 received or receivablo. A grar¥l received before the recognitlon crilerio are satisfied Is recognised as a liability. Donated servlc•s Donaled services arè included as incorne 81 value lo (he charity and as resources expended al Ihe same value. Expenditure All expenditure Is recognised once there is a legal OT conslruclive obligation lo that exp&nditur8. il is probable sèltlemenl is required and the amount can be measured reliably. All costs arg allocated lo IhB applicable expendilure heading that aggregate similar costs lo that category. Where costs cannot be directly attributed to particular h8adlngs they have been allocatèd Dn a basis consislenl wilh the use of resour¢es, with central staff costs allocated on the basis of lim8 spent. and depreciation charges alloeated on the portion of the asset's use. Page 26 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accounting policies IContlnued} RaisiJYg funds These are eosts inCUr￿d in attractlng volunl8ry incom8, the man8gemenl of Investments 8nd those incurred in trading activibes that raise funds. Charitablè activilies Chari18ble expenditure compris8s those costs incurred by the cherity in the delivery of its activities 8nd services for ils beneficiaries. It includes both costs that can be allocated directly lo such aclivilitss and those costs of Èn indir8cI nature necessary lo support them. Support costs Support costs are allocated againsl the respective aclivily con¢8rned. Costs are apportioned lo various cost ¢enlres and funds based on management's best estimates of expenditure incurrèd lor each. Taxatlon The charity is considered lo pass the tests sel out in PaT8graph 1 Schedule 6 of the Finance Act 2010 and therefore il m8els the definition of a charitable CDmpany for UK corporation lax purposes. Accordingly, the oharily is pot8nlially exémptfrom taxation in rospect of incotne or capital gains received within categories covored by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the exlenl thal such income or galns are applled exclusively lo ch8rllable purposes. Herltage assels Watts Ga118ry Trust ha5 a collection ol heritage assets whlch is held in support of the Gallery's primary objective ol increasing knowledge, understanding and appreciation ol George Frederic Walts and Mary Seton Watts. A very significant proportion ol these assets are inalienable. The collecllon comprises ol over 250 paintings and ov8r 800 drawings by G F Watts as well as ov8r 500 pieces ol sculpture. many by G F Watts and IhÉ remaining pl8Ster casts lanonym(>usl fro￿ his sludio. There are many items of Compton pollery including piec8s by Mary Walls hers8lf. In addition, Ihere is a large archive including the Rob Dickins collection of photographs. A very signrficalll proportion of the coll&¢tlDn is available lo view via a ¢01Seclions management database. Additions to the collection are made by purchase or donation. Purchases are initially recorded al cost and donallons at Iheir estimated value. Heritag¢ assets ai8 periodically revalued in line wlh insurance valuations cairied out by exleTnal valuers and based on cornmer¢ial markets. The Trustees do not believe that oblainlng more frequent valuatlons would warrant Iha utilisation ol charitablè resources. The heritage assets are represented by a permanent endowment fund, which has been fully inveslod in the collection. The ass8ts are deemed lo have an indeterminate Ilfe and a hlgh residual value and therefore the Trustees do nol consider it appropriate lo chaigs d8precialion. Although the non depreciation ol this asset is not in accordance with the Companies Act 2006. the TrLJStees believe that this departure Is necessary in order to provide a Irue and fair view. Page 27 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accountlng policies Icontinued) Tangible fixèd assets All classe5 of tangible fixed assets are recorded al cost, less any subseqLJenl accuThulaled depreclation and subsequent aocumulaled impalrmenl losses. Depreclatlon arid amortlsalion Depreciation is provided on tangible fixed a5$6is so as lo write off Ihg Cost or valuallon, less any estimated iesldual value, over their expected useful economic life as follows.. Depreelation method and rate 2Q/D on cosl 10%.33¢A on cost 15% on cost 1 Ovo on c05t Asset class Land and buildings Computers, fixtures & fillings Motor vehicles Plant & equipment Investment propertiès Investment propety is shown 01 tho most re¢ent market valuation. Any aggregate surplus or deficit arising from ohanges in maiket value 15 transferred lo IhB 5tBtemenl of flnancial acllvSlles. Valuadons are consid8red periodically by the Trustees. Fixed asset investmènts Flxed asset Inv9Stmenls are included al tllarket value 81 the balanco sheet dale. Realised gains and losses on investments are calculated as the differenoe between sal85 pioceeds and their market value al the start of the year, or their SLJbsequenl cosl, and are charged or credited to the Statement of Financial Activities In the p9riod of disposal. Unre81ised gains and losses represent the movement in mark81 values during the year and are credited or charged lo tho Slatemenl of Financial Activities based on the market valLJe at the year end. stock Slock is Yalued at the lower of cost and ostlmaled selling price less cosis lo complete and s811, after due reg8rd for Dbsolel8 and slow moving stocks. Cost is delermlned using the flrsl-ln, firsl-oul IFIFOI basis of valuation. Short-lerm debtors and credltors Debtors and cr8dllors with no stated interest rate and recelvable or payable within one ytsar are record8d at the transaction price. Any losses arising from Impairment are recogni5ed In the slalement ol financial activities. Cash and cash equlvalents Cash and cash equivalents comprise cash on hand and call deposits, and other short-lemi hlghly Ilquid investments that are readily convertlble to a known amount of cash and are subject lo an insignificant rk8k of change in v81ue. Page 28 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accounting policiès IContinuÈdl Creditors and provislons Cieditors and provisions are recognised where the charity hag a present obligation resulting from 8 past event that wlll probably result in a transfer of funds lo a third party and the amount due lo sellle the obligation can be measured or estlmated reliably. Creditors and provisions are norrnally recognised at their settlement amount after allowing for any trade dls¢ounls du8. Fund structuro Unrestricted Income funds are general funds that are availab5e for use al the Irustees. dlscrelion in furtherance of ihe objectives Df th8 Group. Designated funds are unrestricted funds sèt aside for specific purposes al the dis¢retion of the trustees. Reslri¢ted income funds are those donated for use in a particular area or for specthc purposes, the use of which is resliieted lo that area or purpose. Further explanation of the nature and purpose of each fund is indud8d in the notes to the financial slalemenls. Pension5 and other po$t rotirement obligations Contributions payable by the Group tts an individual's personal pension scheme are charged lo Ihs slalemont of financial adivilies in the period to which they relate. Financlal Instrum8nts Financial assets and financial liabilities are recognised when thè charity beeome5 a party lo the conlraclu81 provisions ol the inslrumenl. Financial liabilities and equity inslrumgrits are classified according to Ihe substance of the contractual arrangerntsnts entered into. An equity instrument is any conlracl that evidences a residual interest i the assets ol the Group after deducting als of Sts liabililitss. The Group only has financial assets and financial liabilities of a kind that qualify as basic financial instrumenls. Basic financial instruments are inilially recognised al transaction Yalu8 and subsequèntly measured al their settlement value with the excgplioD of bank loans which are subsequenlty measured at amortised Cost using the effective interest method. Summary of 51gnlficant Judgements and key a¢¢ountlng estimates In the appSi¢ation ol the charity's accounting policies, the trustees are required lo make judgerngnt5, eslimales and assLJmplions about the cairying amount of assets and liabilili85 that are not readily apparent from other sources. Th8 8Stimates and associal8d assumptions are based on historical experi8nce and other factors that ar6 consider8d to be relevant. Actual results rnay differ from these eslimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions lo accounting estimates are recognised in the period in which the eslimale 1$ revised wher6 Ihe revision affects only that period, or in the p8riod ol the revision and future periods where the revision affect5 both CUTrent and futLJre period5. Page 29 Walts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accounting policies (Continued) Critical ludgements The following judg8ments (apart from those involving estimalesl have had the most slgnilicant effect on amounts recognised in the financial stalemenls: Depreciation of tanylble fixed assets Depre¢iation is based upon the expecled useful economic life of assets. This requires judg8Tnents lo be made by the Irusl885 and, beino an estimate. the actual useful lives of Ih85e assets may vary between asset category and based on the nature of the asset. Reviews of these policies are perfortned annually to ensure that the d6precialion methods used are appropriate for each class ol tangible fixed sset. Investment propèrty Valuation of investment property is on the basis of the periodic, independent valuations of an expert. Trustees review th8 nè8d for revaluation on an annual basis. Any gains or losses following each Independènt valuation are charged through the Slalement of Financial A¢livSties. Heritage assets Valuation ol heritage assets are Dn th8 basis of the periodic, independenl valuations of an expert. Tiuslees review the need for revaluation on an annual basis. Any gains or losses following each independent valuation are charged through the Sialemgnt of Financial ActNilles. Page 30 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 Income from donations Unrestricted fund5 Restrict8d funds Total 2023 Total 2022 Donations., Patrons and Friends General Donations Gift aid reclalmed Gianis. including capital grants,. SurTey County Council Arts Coijncil - National Portfolio Organisalions Arts Council- Cullure Recovery Fund Round 1 102,848 684,755 85,245 102,848 99.205 884,755 769,381 85.245 42,926 200,000 100,000 704,540 104,540 101,840 204,409 200,OQO 1.177,388 1.317,761 977.388 £977,388 12022 £1,251,056) ol the abovo income was attribuiab18 to unreslricled funds and £200,000 12022- £66.7051 to reslricl&d funds. Income from tradlng actlvitLèS Unr8stricted funds Total 2023 Total 2022 Trading Income.. Admissions Tours of Gallery Sal88 ol goods and servic8S Learning. events and other income 167,720 17,954 909,255 34,990 1,129,919 1,129 919 1,008,523 167,720 165,523 17.954 5,948 909,255 812,9D9 All of the above income for 2023 and 2022 was attrlbutabl8 io unreslric18d funds. Investment Income Unrestrlcted Endowm8nt fund5 funds Total 2023 Total 2022 Income from dividends.. Divldends reG8ivable from listed nvestmenls Interest receivable and similar Income.. Interest receivable Income from rents 174,598 8,618 183,216 226,894 2,682 69.190 246 470 2,682 458 69,190 58,300 255.088 285,652 8,618 £246,470 {2022 - £274,979) of the above income was attributable lo unreslricled funds and £8,61812022 £10,673) lo re51ricted funds. Page 31 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 5 Othèr income Total 2023 Total 2022 Government grants Including fudough incomè 48,310 48,310 All of the above income for 2023 and 2022 was attributable lo unreslricled funds. 6 Expendlture on raising funds and trading costs Total 2023 Total 2022 Dlrèet costs Costs ol generating donations Costs of trading activities Investment management costs 128,562 847,538 128,562 847.538 148.681 756,397 4.650 909,728 976,100 976,100 al Costs of genaratlng donatlons Total 2023 Total 2022 Staff Costs Patrons and Friends costs 128.562 145.311 3,370 148,681 128,562 All ol the above expenditure for 2023 and 2022 was allribulable lo unrestrlcled funds. bl Costs of tradlng activities Total 2023 Total 2022 Trading subsidiary staff costs Trading subsidiary custs 454,410 393,128 847,538 400,721 355,676 756,397 All of the above expendblure for 2023 and 2022 was allribulable lo unr85tricted funds. Page 32 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 6 Expenditurè on raising funds and tradlng cosis Icontlnuedl cl Invèstment rnanagement costs Unrestricted funds Total 2023 Total 2022 Adminislratlon ol the invastments 4.650 4,650 7 ExpenditLtre on ¢harltable actlvities Actlvlty undertaken directly Activity support costs Total 2023 Total 2022 Malntainlng Watts Gallery and its olleclion Great Studio Project Limnerslease Projecl Chape1 Restoralion Fund Physical Energy Fund 1,555,976 101,210 2,705 4,623 96,961 1,761,475 292,496 20,000 30,000 40,331 30.01)0 412,827 1,848,472 121,210 32.705 44,954 126,954 2.174.302 2.117,455 107,231 12,705 20.112 78,340 2,335,843 £1,583.07712022 £2,005,224) of the above exp8ndllure was allribuiable lo unreslricled funds and £591,22512022- £330.6191 to reslrlcled ILJnds. Page 33 Watts Gallery Trust Notes to the Financlal Statements for the Year Ended 31 March 2023 8 Analy51$ of support costs Support costs alloc8t8d to charitable actlvities Actlvlty undertaken directly Activity Total support costs 2023 Total 2022 Malnlaining W8tls Gallery 8nd ils collection Great Studio Project Llrnnerslease Project Chaptsl R6sloralion Fund Other Restricted Prolecl Management Physical Energy Fund 145,008 29,697 174,705 20,000 20,000 30,000 30,000 20.wo 20.000 186,380 20,000 10,000 20.000 20,000 20,000 30,000 30.000 149.697 294,705 30,000 266,380 145.008 Governancè costs Unrestrlctod funds Restricted funds Total 2023 Total 2022 Audit of flnancial sl8tèmenls Accountancy, consultancy and legal fees 14.250 14,250 11,250 130.758 145,008 130,758 145,008 10,302 21,552 other support costs Unrestricted funds Restricted funds Total 2023 Total 2022 Projecl management Office expenses Telephone Insurances Travel and subslstence 120,000 120,000 12,218 18.203 64,273 5,300 219,994 80,000 92,235 15,102 56,340 1,151 244,828 12,218 18.203 64,273 5,300 99,994 120,00(1 Page 34 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 9 Net IncomellExpèndilurel Net Incomellexp8ndlturel are ststEd after charging.. 2023 2022 Audit lees Depreciation of fixed assets 14,250 272,126 11,250 229.322 10 Trusteès. remuneratlon and expensgs During tha year the group made thè following Iransactions with Itustees.. A Burtensh#w A Burtenshaw recelved lolal rgmun8rdlion of £108,174 12022.. £104.3801 during the year. Thi Included bonus paymen15 for achieving his target in 2019 and 2020 bul was not paid 81 the time due lo the Covid-19 pandemic. Legal authority has been oblaSned lo employ and remunèrate Mr A Burtenshaw at a market rale as Dlrecloi of the Charity. During the year expenses ol the following nature were paid lo 1 12022.. 1) trustee.. 2023 2022 Travel and subslstence Entertaining Sundry 6,735 114 120 6,969 992 34 211 1,237 Page 35 Watts Gallery Trust Note5 to the Financial Statements for the Year Ended 31 March 2023 11 Staff costs Th& 8ggregale payroll costs were as follows.. 2023 2022 Wages and salaries Social security cusls Pension costs 1,466,490 121,061 32.829 1,620,380 1.380,OOD 110,090 1.522,001 The monthly average number of persons (including senior management leaml employed by the group during the year was as follows.. 2023 No 2022 No Tea shop Shop Comtnercial ga118ry Management Curatori81 Learning Marketing and fundraising Finance. estates and adminislralion 23 13 22 10 16 11 13 78 81 The staff full lime equivalents werg 51 this year12022: 52}. One 8mployee received emoluments of more than £60,000 during the ye8112022'. Ong). The number of employees whose emoluments fell wllhin the following bands wa5., 2023 No 2022 No £100,001 £110,000 The total employee benefits of the key management personnel of the group were £21 D,264 12022 £204,190). 12 Taxatlon The company is a registered charily and is therefore exempt from taxation. Tax rellgf rèpresents claims submilled prior lo the year end lor MuseLJms and Galleries Exhibllion tax relief. Page 36 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 13 Tangible fixed assets Group Land and bulldings Plant & equipment Tolal Cost At 1 April 2022 Additions 8,884,625 2,602,306 11,486,931 188,906 188,906 Al 31 March 2023 8 884 624 2 791,212 11675,836 Depreciatlon At 1 April 2022 Charge lor Ihtr year 1,297,674 138.797 2,315.583 133,329 3,613,257 272,126 Al 31 March 2023 1.436,471 2 448.912 3,885,383 Net book value At 31 March 2023 7448,153 342,300 7,790,453 Al 31 March 2022 7,586.951 286,723 7.873,674 Charlty Land and bulld5ngs Plant & equipment Total Cost At 1 April 2022 Additions 8,884.624 2,406,384 11.291,008 188.906 188,906 At 31 March 2023 8,884,624 2.595,290 11.479,914 Depreclation At 1 April 2022 Charge lor the year 1,297,674 138,797 2.198,150 118,899 2,317,049 3.753.520 3,495,824 At 31 March 2023 1436,471 Nèt book value Al 31 March 2023 7,448.153 278,241 7,726.394 At 31 March 2022 7,586,950 208,234 7,795,185 Page 37 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 14 Heritage assets Group and Charity Total Cost At 1 April 2022 22,765.564 Depr8clation At 31 March 2023 Net book value At 31 March 2023 22,765.564 Summary of Iransactlon The value ol additions in the live years prior lo the year end dale of 31 March 2023 lolalled £13.000, 811 of which were in 2019. Ravaluatlons Heritage assets were last revalugd In 2012 by Christies al current auctiDn eslimales. Page 38 Watts Gallery Trust Note5 to the Financial Statements for the Year Ended 31 March 2023 15 Fixed asset inv¥$lments Group and charity Investment propertles Inveslmenl propertles Cost or Va5uatlon At 1 April 2022 763,840 Provlslon Al 31 M8rch 2023 Net book value Al 31 March 2023 763,840 Al 31 March 2022 763,840 Investment properlies were valued by Balchttller Monkhouse in the yèar ended 31 March 2011. In subsequent years the valutss have been consldered against market conditions by the Tnjslees and the osts of furthar improvemenls have b88n added. Page 39 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 15 Fixed assel investm8nts IContlnu8d} Group and charity Llsted Inve5tmenls Listed investments Cost or Valuation Al 1 April 2022 Rèvaluations Additions Disposals 6,524,988 1246,9131 Al 31 March 2023 6.278 075 Net book value At 31 March 2023 6.278.075 Al 31 March 2022 6 524,988 Page 40 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 MarGh 2023 15 Fixad asset investments {Contlnuedl Shares In group undèrtakings and particlpatlng Intarests Subsldlary undertaklngs Total Cost Al 1 April 2022 At 31 March 2023 Net book value Al 31 March 2023 At 31 March 2022 Detalls of und&rtaklng$ Details of the investments in which the charity holds 20¥0 or morts of the nomlnal value of any clas5 01 share capital are as follows.. Country of incorporation Proportlon of votlng rights Princlpal and sharès held actlvity 2022 Undertaking Holdlng 2023 Subsidi?ry undertaklngs England and Wales Walls Gallery Tradlng Limited Glft shop and 18a shop Otdinary 100% 100% The Company regislralion number of Watts Gallery Trading Limited is 07184982. The registered office address is.. Down Lane Compton Guildlord Surrey GU31DQ The profit foi the period ol Watts Gallery Trading Limited was £61,717 12022.. £fjOD,2001 and the aggregate amount ol capital and reserve5 at the end ol Ihe peiiod was £1 12022.. £11. The profil for the year for Watts Gallery Trading Limlted is staled after making a distribution of proflts lo Walls Gall8ry Trust of £67.71712022 - £80,904). PagÈ 41 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 16 Debtor5 Group Ch8rily 2023 2022 2023 2022 Trade debtors Due Irorn group undertakings Prep8ymenls Other d6blDrs 8,593 19,148 6.833 138.073 3,000 112.25Ql 260,156 18,975 131.785 11,067 202,687 364,514 3.000 120.208 131 801 11.067 204 460 234,675 17 ¢redltors'. amounts falling due withln one year Group Charity 2023 2022 2023 2022 Bank loans Trade crodilors Other taxation and 80¢ial security Other creditors Accruals 20.000 156,388 20,000 108,598 123.182 70,923 25.244 55,632 257,264 13.356 80,112 222,066 24,088 31,972 179,242 13,032 138,623 Page 42 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 18 Cr•dilors: amounts falllng due aft•r one year Group Charity 2023 2022 2023 2022 Bank1oans Other loans 53,333 136,800 190,133 73,333 136,800 210,133 136.800 136,800 136,800 136 800 Included in bank loans is a £73,33312022 - £93.3331 Coronavirus Business Interruption Loan with a norllinal interest rale o12.210k per annum. The108n lerm is 5 years lo November 2026. Included In other loans is £136,800 12022 £136,800) secured on the Charlty bank 8coounl. The rep¥ymenl d8te is 15 May 2024. No interest is charged on th& loan unless the Charity fails lo make any payment due under the agr8em¢nt, in which case interest is charged at 7.10 from the dale Df non- payment to the dale ol repayrnent. 19 Obllgations under18a5es and hir8 purchase contracts The total value of fuluie mSn1mum leas8 payments was a5 follows.. Group Charlty 2023 2022 2023 2022 Within ono year In iwo to fN8 years 14,591 26.461 41,052 13,939 41,052 14,591 26,461 41,052 13,939 54,991 20 ChaTity statu5 The Charity is a ¢ompany limitsd by guar8ritee and consequenlby does not have share capital. 21 Contlngent Ilabllltles The Truslees of th8 National Heritage Mtrmorial Fund hold a charg8. by way of legal mortgage Dver The G￿81 Studio, Limnerslease. as a continuing security for all monies, obligallons and liabilities under the Grant Contract. Th8 Council of the Borough ol Guildford hold a second charg8, by way of legal mortgage, over The Great Studio, Limnerslease as a continuing security IOT non-repayablg loans recognised as donations in 2017. Surrey County Councll holds a charge, by way of a 18gal mortgage, over the property known as Limnerslease. The charge acts as continuing security for a granl repayable under cert8in oir¢umslanc&s and was agreed as 8 condition ol the donation to the Ch8rlty in 2017. Page 43 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 22 Funds Restricted funds Gallery Re5toratlon fund This fund ropresenls th8 investment in the restored Walls Gallery building fc>11owing the Hope projo¢t. The ongoing r)on-cash cost is the depreciatlon of the restored assets. Limnerslease Ènd Great studlo Funds - These funds were established lo acquire and preserve the W2tls' home and studios and consist of the acquisition costs and investment made in those propertles. In addition lo an elemenl of cash. Other- These funds ar8 lor the support of Ihe16arning programmes al Walls Gallgry - Artlsts, Village and other further development projects. These funds all CDnsisl of Cash. Graham Robertson Trust Fund - ThSs fund Is Invested in the Pollery Building. Grèat studlo Project and Llmnerslease - These funds were established to acquire and preserve the Watts, home and studi05 and collsist of the aoquisilion costs and inve5trnent made in Ihose properties, in addition to an eltsment of cash. Chap81 Restoration Fund - This fund has been established for the preservallon and restoralion of the Watts Chapel and Cemetery. This fund consists of cash. PhysÈcal Energy Fund This fund has been established lo site a PDslhumous cast of Watts. iconic sculpture Physlcal Energy in Complon including apprDpriate landscaping and inlerprelaliDn. This fund currently Consists ol cash. Endowm8ntfunds The Collection- This fund represents the valije DI Ihg Watts Gallery collection of heritage assets. This is a pemianenl endowment fund and rèpresents paintings and other collettion items. Mr5 M S Watts Wlll Trust Fund - This fund was sel up through the will of Mary Walls and is now part of the permanent endowmenl which provides ongoing financial support lor the Watts Gallery Trust. The fund is represgnlod by investrnsnts and cash and only the income generated by Ihe assets can be spent. The capital In this fund can never be spent. Watts Gallèry Permanent Endowment Fund This is a permanent endowment fund lo generate income to help provide financial security for tho Gallery's future. The fund is represented by investments and cash and only the income generated by th8 assets be spent. The capital In Ihis fund Gan never b8 spent. Catalyst Endowment- This is a permanent endowment fund which was established with the gènerosity of the Heritage Lotlery Fund and a number ol private donors. This fund generates income lo help provide financial security for the Gallery's future. The fund is represented by investments and cash and only the income generated by the assets can be spent. The capital in this fund Can never be spent. Watts Gallery Exp8ndable Endowment Fund - This is an expendable endowment fund eonsisting of quoted investments and cash. The income from thB fund helps lo provide financl81 security for the gallery's future. G F Watts Book Fund This expendable fund was established to SLJPPOrt the Wgtts Gallery - Artlsis. Village archlve and eonsists of quoted investments and cash. Both the capital and Income can be spent. Page 44 Watts Gallery Trust Notes to the FinanGial Statements for the Year Ended 31 March 2023 22 Funds (Continued) Group Balance at 1 April 2022 Incom8 Expendifuro TTan5f8rs Olhèr Balance at cognised 31 March ainslllosses) 2023 Unrestricted funds Walls Gallery 1.682,471 2,353.777 (2,679.1771 120,000 1.477,041 Deslgnated Walls Gallery Toial unrestri¢t•d funds 1682,471 2.353 777 2,679 177 120,000 1,477,071 Restrlcted funds Gallery Restoration Fund Graham Robertson Trust Fund Other Grèat Studio Project Limnerslease Chapel ResloTation Fund Physical Energy Fund Total restTlCt8d funds 3,790,941 196,961} 3,693.980 75,642 120.26C> 2,999.715 1,932,018 75,642 54.866 136,7161 2,841,789 1,899,313 200,000 1245,3941 120,0001 1101,2101 120,000} {2,7051 130,000) 79,803 643 432 120,0001 30,000 59,803 588,477 24,955 9,641,811 200 000 471225 fj20,000 36,716 9.213,870 Endowmènt funds Permanent Mrs M S Watts Wlll Trusl Watt5 Gallery Pem)anenl Endowment Collection Catalyst Endowmenl 427,453 116,2471 411,206 3,320,716 22,790,776 1095,609 27,634,554 1128,3701 3,192,346 22,790.776 1.065,511 27,459,839 38,716 183,333 8,618 Page 45 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 22 Funds Icontinuedl Balancè at 31 March 2023 Balance at l April 2022 Income Expenditure Transfers Other rècognlsed ga5nslllossesl Expendable G F Walls Book Fund Walls Gallery Expendable Endowment 3,937 3.937 745.829 749,766 26,864 26,864 718.965 722,902 Total èndowment funds 28,384,320 8,618 210 197 28,182,741 Total funds 39,708,602 2,562.395 3 150.402 246,913 38,873,682 Page 46 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 22 Fuftds Icontlnuedl Balancè at 1 Aprll 2021 In¢0me Exp8ndlture Transfers Other Balance at rècognlsed 31 March galnslllossesl 2022 Unrostricted funds W8tts Gallery 1,574.534 2.582.868 12.914.952) 440,000 21 1,682,471 Designalad Walls Gallery 440 000 440.000 Total unrg$trlcted fund5 2,014534 2,582,868 2,914,952 21 1 682,471 Re5trlcted funds Gall&ry Resloratlon Fund Graham Robertson Trust Fund 3,887.￿J3 196,9621 3.790,941 75,642 120,885 3,079,61 fl 1,944,723 75,642 120,260 27,337 2,999,71 s 1,932,018 Other Great Studio PTOj8 Limners1ease Chapel Resloralion Fund Physical Energy Fund Total restrlcted funds 14,643 115.268} 1107,232} 112,7051 99,001 721.772 914 120,112) 79,803 643,432 9.929 536 15,557 330.619 27,337 9.641,811 Permanent Mrs M S Walls Will Trust Walls Gallery Perrnan8nt Endowment Collection Catalyst Endowment 41 5,356 12.097 427,453 3.225.139 22,790.776 1.056 110 27,487,381 95,577 3.320,716 22,790,776 28,826 fj 095,609 136,500 27 834.554 10,673 10,673 Page 47 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 22 Fund5 (Contlnued} other Balance at recogni58d 31 March galnslllossesl 2022 Balance at 1 Aprll 2021 Income Expendlture Transfers Expendabl8 G F Watts Book Fund Watts Gallery Expendab5e Endowment 3,937 3,937 674 679 678,616 51,148 51,148 20,002 20,002 745,829 749,766 Total endowment funds 28,165,997 156.502 28,384,320 Total funds 40.110,067 2,660,246 3,245.571 183,860 39.708,602 Page 48 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 22 Funds {Conllnuedl Charlty other Balance at Balance at recognised 31 March 1 April 2022 Inoome Expendilurg Transfers gaSnslllos5esl 2023 Unrestricted funds General Watts Gallery 1.682.470 1,506,239 11,831,639) 120.000 1,477.070 Designated Walls Gallery Total Unrestrlcted funds 1.682,470 1,506 239 1,831639 120,000 1477,070 Rèstrlcted funds G8llery Resloralion Fund Graham Robertson Trust Fund other Great Studios Project Limnerslease Chapel Restoration Fund Physical Energy Fund 3,790.941 196,9611 3,693,980 75,642 120.260 200,000 75,642 54,866 {245,3941 120,QOOI 2,999,715 fj,932,018 1101,2101 (2,705) (20,000) 130,0001 136.7161 2.841,789 1,8g9,313 79.803 120,0001 59.803 643,432 588,477 Total restricted fLsnds 9,641,811 200,000 471.225 120,000 9,213 870 Page 49 Watts Gallery Trust Notes to the Financial Statements foT the Year Ended 31 March 2023 22 Funds Icontinuedl other Balanee at recognlsed 31 March Expendlture Transfers 98lnsl{losse$l 2023 Balance at 1 Aprll 2022 Incom• Endowment lunds Permanent Mrs M S Walls Will Trust Watts Gallery Permanent Endowment Collection Catalyst Endowment 427.453 {16,2471 411,206 3,320,716 22,790.776 {128,3701 3,192,346 22,790,776 1,095 609 27 634.554 38,716 .L183,333 1065,511 27,459,839 8,618 Expendable GF Walls 8ook Fund Watts G8118ry Expendable Endowment 3,937 3,937 745,829 749 766 26.8641..- 718,965 26,864 722 902 Total endowmènt funds 28.384 320 210.197 28,182 741 Total funds 39,708,601 1.714,857 2,302,864 246,913 38.873.681 Page 50 Watts Gallery Trust Notes to the Financlal Statements for the Year Ended 31 March 2023 22 Funds (Continued) Other Balance at Balanc8 at recognised 31 March 1 Aprll 2021 Income Expendittjre Transfers gainslllossesl 2022 Unr8strScted funds General Watts Gallery 1.593,830 1,812,276 12,163,657) 440.000 21 1,682,470 Designated Watts Gallery 440,000 440 000 Total Unreslrlcled funds 2.033,830 1,812.276 2,163,657 21 1,682,470 Rèstricted funds Gallery Restoration Fund Graham Robertson Trust Fund Othar Great Sludios Project LiTRnerslease Ghapel Restoration Fund Physical Energy Fund 3,887.903 196,9621 3.790,941 75,642 120,885 75,642 120,260 14,643 115,2681 3,079,610 1,944,723 1107,2321 {12.7051 27,337 2,99g,715 1.932,018 99,001 914 120,112) 79,803 721,772 78,340 643 432 Total restrlcted funds 9,929,536 15,557 330,619 9641.811 Page 51 Watts Gallery Trust Notes to the Flnancial Statements for the Year Ended 31 March 2023 22 Funds (Continued) Other Balance at recognlsed 31 March ExpenditLtre Transfers galnsll1055esl 2022 BalBncg at 1 Aprll 2021 Income Endowment funds P8mianenl Mrs M S Walls Will Trust Watts Gallery Permanent Endowmènt Collection Calalysl Endowrllfynl 415,356 12.097 427,453 3,225.139 22,790.776 95.5Tt 3.320,716 22,790.776 1056110 27,487,381 10,673 10,673 28,826 1,095,609 13fj 500 27 634,554 Expendèble GF Watts Book Fund Watts Gallery Expendable Endowment 3,937 3,937 674.679 678,616 51,148 51.148 745,829 749.766 20,002 Total endowment funds 28.165.997 61,821 156,502 28,384,320 Total funds 40,129,363 1,889.654 2,494,276 183,860 39,708.801 The funds are represented by a mix of assets, primarily property and artwork, as disclosed lurther in noie 23. Transfers Reversal of a transfer of £440,000 made in 2021 from Unreslricled General Funds to Unrestricted Designated Funds sel asSde for the following purposes.. Websile, Digital and IT Fund - to Teplace IT equipment and improve digital access and engagement Covid Fund - to cover operating costs and reduced income slreatns due to the ongoing effects of the p8ndemic. Buildings and Eslale Maintenance Fund to support the ongoing dev8lopment, conservation and maintenance of the estate. Future Sustainabllily Fund to support slral8gic commercial inltiatwes and improve the future fin8n¢Sal sustainability of the organisalion. Page 52 Watts Gallery Trust Notes to Ihe Financial Statements for the Year Ended 31 March 2023 23 Analysis of n&t assets between funds Group . Year endèd 31 March 2023 Unrestrlcted funds- General Restricted funds Permanent Total funds Tanglble fixed assets Heiitage assets Fixed asset investments Current assets Current liabilities Credllors over 1 year 531,636 7.258,817 7.790,453 22,765.564 22,765,564 5.344,525 7,041,91 S 72,652 1,723,147 1257,2641 190 fj33 688.198 520,333 1209,7631 53,333 1,009.192 1,130,162 147,5011 136,800 Total net assets 1477,071 9 213,870 28,182 741 38,873,682 Charlty - Year endad 31 March 2023 Unrestrleted funds - General Restrictèd funds P¢rmanent Tot81 funds Tangible fixed asseis Heritage assets Fixed ass81 investments Current assets Current liabilities Creditors over 1 year 467,577 7.258,817 7,726,394 22,765,564 22,765,564 5,344,525 7,041,916 72,652 1,658,348 1179.236} 138,800 688,199 453,035 {131,7411 1,009,192 1,130,162 147,5011 136,800 Total net assets 1.477,070 9,213,870 28,182,741 38,873,681 Group - Y8ar onded 31 March 2022 Unrestrlcted funds - Genèral Restricted funds Pemianent Total funds Tangible fixed agsels Heritage assets Fixed asset inveslm8nts Current assets CUT￿nt liabilities Creditors over 1 year 427.960 7,445,714 7,873,fj74 22.765,564 22,765,564 5,554,722 7,288,828 64,034 2.212.735 (222,0661 210 133 688,198 848,729 1209,0831 73.333 1,045,908 1,299,972 112,9831 136800 Total nel a8S8ts 1 682,471 9,641,811 28.384,320 39,708,602 Page 53 Watts Gallery Trust Notes to the Financial Statements for the Year Ended 31 March 2023 23 Analysls of ngt assets between funds IContlnued} Charity . Year ended 31 March 2022 Unrastrlctod funds - Gen8ral Restricted funds Permangnf Total funds Tangible fixed assets Heritage asS9ts Fixed asset inveslmenis Current assets Curr8nt liabilit185 Creditors over 1 year 349,471 7,445,714 7,795,185 22,T65,564 22,765,564 5,554,722 7,288,829 64,034 2,134,446 1138,623) 136800 688.199 770.440 {125,6401 1,045,908 1,299,972 112,983} 136800 Total nel assets 1,682,470 9,641,811 28,384,320 39,708,601 24 Related pariy transaction5 During Ihe year the group made the following related party transactions. Tiustees and organisations in which trustees have a controlling Inferest During the year, the Group received donations from Irustees and organisations In which Iruslees have 8 Gonlrolling int8r8St, without conditions attached, totalling £260,00012022 £324,061). Al the balance sheet date the amount due lolfrom Trustees and organisalions in whioh Iruslees have 8 controlling interest was £Nil12022 £Nill. Page 54