MUSEUM OF LONDON
Governors' Report and Financial Statements for the year ended 31 March 2010 Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
CONTENTS
Reference and administrative details
Annual Report
Independent Auditors' Report
Consolidated Statement of Financial Activities
Consolidated Balance Sheet
Museum of London Balance Sheet
Consolidated Cash Flow Statement
Notes to the Financial Statements Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
REFERENCE AND ADMlNlSTRA TlVE DETAILS
Name Museum of London
Address 150 London Wail London EC2Y 5HN
Board of Governors A Board of Governors, consisting of 18 members of whom the Greater London Authority (GLA) (prior to April 2008 : the Prime Minister) and the City of London Corporation (COL), each appoints 9 members, is responsible for the general management and control of the Museum. The following Governors served throughout the financial year, except where indicated.
Appointed by the Kenneth Ayers City of London Michael Cassidy CBE Corporation Juiian H Malins QC Robert Dufton Tom Hoffman Michael Welbank Rev Dr Martin Dudley Maurice Groves (appointed 16 April 2009) Rt Hon the Lord Boateng P.C. D.L. (appointed 17 December 2009)
Appointed by the GLA Jennette Arnold (prior to April 2008 : by the Lesley Knox (resigned 2 December 2009) Prime Minister) Camilla Mash Sir Michael Oliver (resigned 10 January 2010) Mark Palmer-Edgecumbe Dr Mark Patton LLD (resigned 20 November 2009) Geoffrey Wilson OBE Eric Sorensen Rosemary Ewies (appointed 12 April 2010) Andrew Macdonald (appointed 12 April 2010) Eric Reynolds (appointed 12 April 2010) Biondei Cluff (appointed 12 April 2010)
Administration Under the Museum of London Acts 1965 and 1986, the Board is required to appoint a Director of the Museum to be responsible to the Board for:
The care of all property in possession of the Board; The general administration of the collections vested in the Board and any place where those collections are kept; and - The administration of any services provided by the Board in the exercise of their functions.
The Treasurer and Secretary to the Board are required to be officers of the City of London Corporation
The Director Professor Jack Lohman Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
Treasurer Paul Mathews, Guildhall, London, EC2P 2EJ.
Secretary Chris Duffield, Guildhall, London, EC2P 2EJ
Bankers Lioyds TSB, 25 Gresham Street, London EC2V 7HN Chamberlain of London, Guildhall, London, EC2P 2EJ
Legal Advisers Andrew James Colvin, Guildhall, London, EC2P 2EJ. Farrer & Co, 66 Lincoln's Inn Fields, London WC2A 3BR
Auditors PricewaterhouseCoopers LLP 80 Strand London WC2R OAF
Investment Adviser BiackRock lnvestment Management 33 King William Street London. EC4R 9AS
SUBSIDIARY The financial statements consolidate the accounts of the Museum of UNDERTAKINGS London together with its subsidiary undertakings, the Museum of the Port of London and Docklands. Museum of London Trading Limited and the three Trust Funds.
Museum of London The Museum of the Port of London and Docklands is a company Docklands limited by guarantee and a registered charity. It is constituted as a subsidiary undertaking of the Museum of London by virtue of the control that the Governors of the Museum of London exercised over appointments to its Council of Trustees. On 1 April 2009 the museum was amalgamated with the Museum of London and all the assets and liabilities of the subsidiary were transferred to the parent body. From that date the subsidiary company became dormant.
Museum of London The Museum in Docklands (Trading) Limited was incorporated on 13 (Trading) Limited April 2005 as a company limited by shares and was a fully owned subsidiary of the Museum in Docklands. From 1 April 2009 this company became a subsidiary of the Museum of London and was renamed Museum of London (Trading) Ltd. Its principal activities are the provision of corporate hire and catering services and the retail function at the museum shops.
The Trust Funds The Trust Funds were acquired from the London Museum in accordance with the provisions of Section 2 of the Museum of London Act 1965 and are separate legal entities. The Board of Governors appoints their Trustees. Individual financial statements are produced for each trust and they are also consolidated into the financial statements of the Museum of London. The trusts are:
London Museum Fund Joicey Fund Mackenzie Bell Fund
The appropriate clauses defining the control of their expenditure are:
London Museum Fund "The Trustees shall hereof apply the income of the Charity for such charitable purposes as the Trustees shall from time to time consider best in the interests of the Museum including in particular:
The acquisition for the Museum of artefacts, pictures, photographs, books, manuscripts, films and other objects of any 3 Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
description whatsoever relating to any aspects of the history of London. The rendering of assistance to the Museum in preservation, maintenance and repair of objects of ail kinds owned by or in the custody of the Museum for the purposes of exhibition to the public or for use for the purposes of study or research. The promotion of the study of history of London by the publication of books and other printed matter, the provision of exhibitions, lectures, seminars, recitals, recorded music and prizes and the commissioning of literary or artistic works, photographs or films or = The provision of improvement of amenities and facilities at the Museum".
Joicey Fund The Trust was established from the estate of John George Joicey. The relevant extract from his will states: "The remainder of the said estate shall be made over to the Trustees of the London Museum to form a fund, the income from which shall be applied as the Trustees of the Museum think fit in the purchase of articles, specimens, curios, etc., for the Museum".
Mackenzie Bell Fund "The said assets and property and any income thereof shall be used as the Trustees of the London Museum shall from time to time think fit for the purpose of maintaining and adding to the collection in the said Museum" Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
ANNUAL REPORT STRUCTURE, GOVERNANCE AND MANAGEMENT
INCORPORATION AND STATUS
The Governors present their annual report and financial statements for the year ended 31 March 2010
The Museum of London was established by the Museum of London Act 1965 and was opened in 1976. It is governed by the Museum of London Act 1986 and the GLA Act 2007. The Museum was previously recognised as an exempt charity under the provisions of Schedule 2 of the Charities Act 1993 as amended by the Charities Act 2006, with the DCMS acting as its Principal Regulator in accordance with the Act. Following the transfer of sponsorship from the DCMS to the GLA, the Museum was required by the Act to register with the Charity Commission and this process is currently unde~laywith a view to completion by 31 March 201 1.
The Museum has five subsidiaries: Museum of London (Trading) Ltd, the London Museum, Joicey and Mackenzie Beli Trust Funds and the Museum of the Port of London and Docklands (dormant since April 2009), and therefore presents consolidated accounts.
The reference and administrative details on pages 2 to 4 form part of this report.
GOVERNOR RECRUITMENT, APPOINTMENT AND INDUCTION
To 6 April 2008 Governors (who are also the Trustees under charity law) were appointed in equal number by the Prime Minister and the City of London Corporation in accordance with the requirements of the Museum of London Act 1986 and guidance issued by the Commissioner for Public Appointments. The Governors serve for four years and are eligible for re-appointment by their sponsoring body. Since 6 April 2008, the GLA has the power to appoint Governors to replace the Prime Minister's appointees as and when vacancies arise.
Governors appoint the Chairman from among themselves. When Board vacancies arise, the Chairman of the Board is responsible for advising the GLA and the City of London Corporation of the needs of the Museum with a view to ensuring a proper balance of expertise, including professional and financial expertise, and that the balance of GLA and City of London Corporation appointments is maintained.
Governor induction is managed by the office of the Director of the Museum of London. The standard induction procedures are that Governors receive a copy of the Museum's Code of Practice which describes the committee and management structure and the duties and responsibilities of Governors. To underline the importance of Governor responsibilities the procedures require Governors to sign to confirm that the Code of Practice has been received and is understood. Induction procedures require that Governors also receive the Museum of London Acts together with the Museum's Financial Governance Manual, Strategic and Business Plans, Annual Report and Accounts, Annual Review and Guidebook, the Museums Association's Code of Ethics and Charity Commission guidance documents on trusteeship, good governance, conflicts of interest, and the "hallmarks of an effective charity". This induction was reviewed in 2010 in the light of the move to the GLA, as the Museum is no longer an NDPB but a charity governed by the Charity Commission. The Nolan principles form the foundation of the Governors' induction.
The Director of the Museum also meets with new Governors to explain current issues and future plans, introduce them to Executive Directors and to offer a tour of the Museum.
ORGANISATIONAL STRUCTURE
The Museum of London is responsible for the management of the Museum of London at London Wall, the Museum of London Docklands, and the Museum of London Archaeology (MOLA) which is a division of the Museum of London. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
The Board of Governors sets broad strategic direction, long-term objectives and priorities for the Museum. The Board, which meets four times a year, is also responsible for ensuring that the Museum's management team fulfils its responsibilities for the effective, efficient and economical management of the organisation. There are five Board committees on which Governors serve, ail of which have met during the year:
= Archaeology = Audit = Building Development Finance and General Purposes (incorporating the former Remuneration and Terms of Service Committee) Trust Fund Management
The Management team is headed by the Director, Jack Lohman, who is appointed by the Board. The primary functions of the Museum relate to care and management of collections, lifelong learning, archaeological excavations and research, exhibitions and other public programmes. All are designed to inform and engage visitor interest in the history, heritage and cultures of London. To achieve its aim the Museum has five divisions, under the overall direction of the Director:
Finance and Corporate Services: Responsibility for finance, human resources, security, facilities and estates, IT, corporate planning, insurance and risk management, front of house services - retail and licensing, hospitality, visitor services - and liaison with the GLAand City of London Corporation.
Major Projects: Responsibility for planning and delivery of major projects and management of development, conservation and collections care and the London Museums Hub.
Collections and Learning: Responsibility for curatorial departments (Archaeology Collections and Archive and History Collections), learning and information resources.
Programmes: Responsibility for marketing and communications, design, exhibitions, events and community engagement work across the Museums.
Museum of London Archaeology: Responsibility for the operational management of MOLA, providing archaeology services to the property and heritage sectors.
The five divisional directors, together with the Director, form the Executive Committee, which meets at least once a month, and is responsible for the operational management of the Museum.
RELATIONSHIPS WITH RELATED PARTIES
Governance is primarily exercised through the Board of Governors appointed by the Museum's two principal funders. Bi-annual meetings are held with officers of the City of London Corporation and the GLA to consult on the business plan and review progress. The City of London Corporation is the Museum's landlord at its premises at London Wail and Eagle Wharf Road, and supplies various services to the Museum. In addition, two of its officers are appointed as the Secretary and Treasurer to the Museum, as required by the Museum of London Act 1965.
Note 18 to these financial statements includes details of the Museum's transactions with the GLA and the City of London Corporation.
OBJECTIVES & ACTIVITIES
GOVERNING OBJECTS
The principal governing document of the Museum is the Museum of London Act 1965 (as subsequently amended). This requires the Board of Governors to
(a) Care for, preserve and add to the objects in their collections; (b) Ensure that those objects are exhibited to the public and made available to persons seeking to inspect them in connection with study or research; Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
(c) Generally promote understanding and appreciation of historic and contemporary London and of its society and culture, both by means of their collections and by such other means as they consider appropriate; (d) Take any action as they think necessary or expedient to fulfil the aims and objectives of the Museum set out in legislation.
PUBLIC BENEFIT
As an exempt charity (although see page 5 -registration is currently in progress) the Museum is not currently subject to the requirements of the Charities Act 2006 ("the Act") which would require it to publish details of the public benefit it delivers. Notwithstanding the absence of a legal requirement to disclose, the Governors feel it is appropriate so to do. The Governors believe that the Museum delivers charitable benefits under two of the headings allowed by the Act; firstly and primarily through the advancement of the arts, culture, heritage or science and secondly through the advancement of education.
As entrance to the Museum is unrestricted and is either free (Museum of London) or at a modest fee (Museum of London Docklands - free admission from 1 April 2010) the Governors believe that there are no unreasonable restrictions on access to the benefits which are therefore available to the public in accordance with the definition of the Act. The Governors believe that the remaining requirements of disclosure placed on charities by the Act are met by the Governors Report contained herein.
OUR VISION
Our vision is to create a revitalised, world-class museum that embodies the spirit and energy of the world's greatest city and its people; a museum that plays an active role in the life of the capital both today and in the future; a museum that is a welcoming, inspirational and innovative destination to all visitors as well as a centre of excellence in research, curatorship, conservation and learning. A modern museum with ambitious future plans.
OUR MISSION AND PURPOSE
Our mission is to inspire a passion for London, a passion for Learning. This is through increasing public awareness, appreciation and understanding of London's cultural heritage, its people and its stories.
We pursue this by: Engaging visitors with exciting programmes and exhibitions Sharing, interpreting and conserving a unique national collection that defines London and its oeoole 'Cresting inspirational learning opportunities for all Facilitating worldwide access to our resources, expertise and research Developing partnerships that extend the ~useum'snetwork and profile nationally and internationally Discovering new archaeological evidence that shapes and reshapes our understanding of London Leading the London Museums Hub for London's 250 non-national museums showcasing the capital's rich and diverse collections
STRATEGIC OBJECTIVES 2009112
The Museum's strategic objectives for the three year period 2009112 were as follows:
To ensure that the visitor experience at Museum of London and Museum of London Docklands is appealing, engaging and welcoming To secure our financial and operational stability Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
To raise the public profile of Museum of London, Museum of London Docklands and Museum of London Archaeology.
BUSlNESS DEVELOPMENT OBJECTIVES
The Museum of London established the following detailed objectives for 200911 0 to support delivery of the strategic objectives:
To successfully deliver and launch the Capital City project, including the Galleries of Modern London and the Clore Learning Centre To enhance the Museum's brand To deliver an exciting and dynamic programme and to meet our visitor targets To position the London Museums Hub to play a leading role in the 2012 Cultural Olympiad and deliver the 200911 1 Business Plan To continue to improve our internal management and financial sustainability
ACHIEVEMENTS AND PERFORMANCE
OVERVIEW
2009110 saw the Museum move into the final phase of its major transformation. The new Galleries of Modern London were opened in May 2010. The project comprised:
New Galleries of Modern London from 1666 to 2012 Sackler Hail Inspiring London City Gallery
The Museum assumed formal control of the site in March 2010, meeting a significant milestone and signalling the beginning of an intensive period of operational preparation. During the year the exhibition fit out was completed, the final elements of physical content were agreed, a long lead press campaign began and the installation of 7000 objects across four new areas got underway. The Lord Mayor's Coach made a historic return to the Museum, ready for display in its new City Gallery. Work was completed on the complex and ground breaking multimedia and interactive exhibits including a specially commissioned film that will be shown in Sackler Hall. An extensive recruitment campaign was also initiated to ensure a full complement of Visitor Hosts ahead of opening.
The Clore Learning Centre, the second element of the transformational project, opened in September 2009 and has enabled the Museum to enhance the quality and scope of its learning provision. The development included the Weston Theatre, flexible learning spaces, a seminar room and a fully equipped e-learning studio. A successful programme of launch events was delivered and, in the first two weeks, the Centre was used by the full spectrum of museum users including under-fives, schools, adult learners attending evening classes, community groups and families, with excellent feedback across the board.
Overall the Museum of London had 275,434 visltors in 2009110 which was a 3% Increase on 2008109 although this result was just over 4,000 short of the forecast for the year. This was an impressive result considering the continued closure of the lower galleries. Museum of London Docklands had 95,569 visltors and was also just over 4,000 short of the forecast for the year. Figures were slgnlficantly below the 2008109 results which were due to the phenomenal success of the Jack the Ripperexhibition in that year. Virtual visits to the Museum fell slightly from 4.8m to 4.5m although this was in part due to a change in the software used to analyse the website statistics.
A key priority for the London Museums Hub has been its positioning to play a role in the Cultural Festival for the London 2012 Games and a significant part of the budget was devoted to the development of the Stories of the World project. The project is being led by the Museums, Libraries and Archives Council (MLA) in partnership with the London Organising Committee of the Olympic and Paralympic Games (LOCOG) and forms a key part of the London 2012 Cultural Festival. Each of the four Hub museums will work with a cluster of non-national museums drawn from across the capital, Museum of London Annual Report and Financial Statements Year Ended 31S' March 2010
using a different theme to explore London's character under the title London: World City. This year saw full endorsement by MLA and LOCOG for the content and outputs devised for the project
Museum of London has been focusing on bringing together different strands of activity related to London 2012. Alongside the Stories of the World project, the Museum shop has been an official stockist of Olympic pins including the limited edition '3 Years To Go' pin which was accessioned into the Museum's collection in July with only 3,000 pieces ever made. The Museum has continued to explore commercial opportunities linked to the Games, particularly the opportunities for Museum of London Dockiands. The Museum refreshed its Olympics Collecting Strategy outlining in more detail the different strands of collecting activity and development of a close relationship with LOCOG. The Women making the London Olympics exhibition opened in March at Museum of London Docklands.
The Museum has progressed its aim to become a modern and high performing institution in all areas. 2009110 saw the first groups of staff complete Certificates and Diplomas in Management and a second investors in People diagnostic was completed which demonstrated that significant progress had been made, ahead of the formal assessment now scheduled for summer 2010. Other achievements included the successful implementation of a new pay and grading structure in November and the rollout of a comprehensive business continuity plan. The Museum appointed its first Records Manager and an Information Strategy was approved for the whole organisation.
The Museum continues to develop and improve its commercial offer through its trading subsidiary the Museum of London Trading Limited. A wide range of new retail products have been sourced or developed ahead of the opening of the new galleries. Major capital projects include the development of the new London Wall Bar and Kitchen in partnership with Benugo, that will launch to coincide with the new galleries and a project to deliver fully refurbished corporate hire venues at Museum of London in Autumn 2010.
Visitor Figures By Museum (excluding corporate hire)
Key Performance Indicators . . .. .- 1 of mus&ms users (on-site,"irtual
events) Total number of website visits I , Number of pupils in booked on-site formal learning 64.286 24,690 +160% programmes Number of pupils in booked off-site formal learning 18,292 12,461 +47% programmes inc video conferencing Number attending informal learning events 56,227 67,106 -16% Number of objects out on loan 1489 1471 +I8 (90 loans) (83 loans) % of onsite visits made by Museum of London 32% 34% -2% people who live or work in London (visitor survey) Museum of London 52% 53% -1 % Docklands Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
Indicator 2009110 2008109 +I- % % of onsite visits made by Museum of London 7% 7% - people who live or work in the City of London (visitor survey) Museum of London nla nla nla Docklands VFM cost per user (visitor on-site or off-site £38.66 £ 32.28 +20% programme attendee) Retail spend per on-site MuseumofLondon £1.81 £ 1.62 +12% visitor Museum of London £0.69 £0.78 -12% 1 Docklands 1 % of onsite visits made by / Museum of London 1 49% 1 47% 1 +2% overseas tourists (visitor I I I survey) Museum of London 24% 21% +3% Docklands
2009110 saw a 13% reduction in onsite visitors in comparison to the previous year, reflecting the impact of the continued closure of the lower galleries at Museum of London and the absence of a major exhibition at the Museum of London Docklands. This resulted in an increased cost per user. However, it should be noted that 2009110 was not a typical year for visitor numbers and we expect to see a reduction in cost per user following the opening of the new galleries in 2010111 and the scheduling of major exhibitions from 2011112 onwards. The fall in informal learning numbers was due in part to reduced levels of programming whilst the focus was on the launch of the new galleries.
GALLERIES AND EXHIBITIONS
During 2009110 the Museum continued to deliver a varied programme of smaller exhibitions. At Museum of London there were three distinct displays. Flashback, an exhibition by the photographer Tom Hunter opened in May 2009 in the Museum foyer. The series of photographs was commissioned to celebrate and promote the new Galleries of Modern London, placing 21st century Londoners in scenes using objects and costumes from the Museum's collection.
The Museum continued to explore international themes through its programming. June also saw the opening of the Forward to Freedom: the Anti-Apartheid Movement and the liberation of South Africa. The display was timed to mark the 50th anniversary of the formation of the Anti-Apartheid Movement and completed in partnership with the Anti-Apartheid Movement Archives Committee. Members of the ~ovementwere involved indelivering exhibition tours and workshops for students. This was followed by the Museum's work in partnership with the Polish Cultural Institute to host London Creatives: Polish Roots a small display of photographic portraits and film interviews of Polish 'cultural creators' living and working in London, as part of the Polska! Year Festival.
At Museum of London Docklands the main summer attraction was the Big Dig installation which was visited by 4,572 budding archaeologists. The installation consisted of bespoke archaeology trenches containing objects that children and their families were able to unearth. Museum experts showed visitors how to observe, record, analyse, identify and interpret their finds. The LandFall exhibition, which ran until May 2009, consisted of new work exploring the Atlantic Ocean as natural phenomenon, transporter of dreams and peoples using painting, collage, sculpture, textiles and music.
Temporary displays were also delivered throughout the year as part of the London, Sugar and Slavey gallery. Living Ancestors was an exhibition of portraits of centenarian women from Dominica. Loss and Liberty was a collection of ceramic artworks and poems created by offenders from HMP Wandsworth and inspired by themes in the gallery. The third display during the year featured stamp designs from the 1930s onwards commemorating the abolition of slavery in Post Abolition: Commemorative stamps from around the world which was timed to inaugurate the year-long London Festival of Stamps.
The final temporary exhibition of 2009110 was Women Making the London Olympics, which opened on International Women's Day. This exhibition celebrates the work of women on the construction of the London Olympic site, through photographic portraits. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
Exhibitions Summary -. .
13 M-010 Anti-Apartheid '12 June - 6 September 2009 Movement and the liberation of South Africa I London Creatives: Polish Roots I 1 October - 1 November 2009 Museum of London Docklands Landfall 5 February - 31 May 2009 Living Ancestors 1 April - 31 July 2009 Big Dig 11 June - 6 September 2009 Loss and Liberty 5 August - 30 November 2009 Post Abolit~on: Commemorative stamps from 18 January - 30 June 2010 around the world I Women making the London Olympics 1 8 March - 31 October 2010
Alongside temporary exhibitions, this year has seen exciting developments to several areas of the permanent galleries, in addition to the work on the new Galleries of Modern London. The temporary London's Burning display was dismantled and objects were reincorporated into the new and renamed 1550s - 1660s: War, Plague and Fire gallery. This included the revamped Great Fire audiovisual display which is exceptionally popular with visitors and an important part of school visits. Work has also begun on the new Archaeology in Action display area which is situated between the London before London and Roman galleries. This will showcase archaeological work and practice in London and offer a location for an ongoing programme of archaeology-based events. During 2009110 work has also been completed on research and concept planning for the Museum's next major project, the redevelopment of the Roman Gallery.
COMMUNICATIONS
Press and marketing activities continued to deliver profile-raising coverage for the Museum throughout 2009110. Highlights included the temporary photographic exhibition by artist Tom Hunter which included significant pieces in the Evening Standard and Financial Times alongside numerous other publications. Archaeological discoveries continued to attract impressive coverage, particularly the display at the Museum of London Docklands of the Roman millefiori dish, found at an archaeological dig at the site of a Roman cemetery in London, which attracted broadsheet and television coverage. The display of a newly discovered Ball and Chain from the Thames generated coverage ranging from the Guardian to the New York Times.
Marketing campaigns targeting families, with advertising on the underground and in local press, were delivered for both Museums during the Easter, summer and Christmas holidays including the Big Dig summer attraction and the Christmas Victorian Grotto at Museum of London Docklands. There was ongoing promotion for the adult and family events programmes throughout the year.
Promotion of the new Galleries began in earnest in October with a successful long lead press launch which resulted in a range of coverage from Design Week to the Times Educational Supplement. This was followed by the development of monthly stories to raise the Museum's profile in the build up to the launch and regular tours for journalists and other partners to see the new galleries. The planning for an intensive programme of events and stakeholder previews was completed during the second half of the year. The high profile advertising campaign, You Are Here, was developed and planned for delivery across over 300 tube and bus stations in early 2010111. A viral campaign and other marketing materials such as Oyster card wallets were also developed ready for the launch.
Digital delivery of services and resources is a central part of the Museum's operation. In 2009110 the Museum initiated the second stage of its website upgrade project, overseen by a revised Web Strategy Group. The project reviewed the existing technical infrastructure, assessed the site architecture to improve navigation and agreed the re-design for the homepage. The upgraded site will support visits to the Museums, facilitate access to the Collections Online project, improve navigation of all pages including micro-sites and offer a clear representation of all aspects of the organisation. The Museum has continued to enhance its online presence through the employment of web 2.0 opportunities using sites such as Facebook and Twitter (which both have over 2000 followers) to Museum of London Annual Report and Financial Statements Year Ended 31" March 2010 promote news and activities. enews subscriptions have increased by 35% with over 12,500 by the end of 2009110.
COLLECTIONS
The Museum's collections continue to develop in order to document the past and present culture of London. Acquisitions ranged from oral history interviews and paintings to bronze sculptures and vinyl records. The commission of Tom Hunter 'Flashback' photographs will join the permanent coliections. Significant acquisitions also included photographs selected from the Roots to Reckoning exhibition (2005106) which consisted of over 100 images showcasing the lives and times of three pioneering Jamaican-born British photographers, Neil Kenlock, Armet Francis and Charlie Phillips. The Museum was also given one of the largest collections of medieval and early modern buttons in the UK with over two and a half thousand beautiful buttons of all shapes and sizes ranging in date from the late 14th to the late 19th century, recovered from the banks of the Thames over a period of 30 years.
As part of its collections development, the Museum aims to rationalise the objects it holds and this year saw significant progress with the transfer of two discrete coilections to new homes. A large collection of photographic prints and negatives from the Photo Union was transferred to the Mary Evans picture library, in line with the wishes of the original depositor, and a group of 147 theatrical costumes on loan from the Royal Shakespeare Company since 1956 was transferred to the V&A's Theatre Collections, a dedicated theatre collection which will allow more access for researchers as well as creating additional space in the Museum's Costume Store.
The Museum has continued to progress its research strategy with work to produce a prospectus of academic research possibilities which will be made available on our web site. The Museum initiated its academic conference programme in the new Weston Theatre with Pomp and Powec Carriages as Status Symbols in November which was the first international conference in many years to look at the European dimension of coach building, with speakers from Europe and the US and attended by over 90 delegates over two days.
New displays on the Sainsbury's Archive and the Port and River Library and Archives were completed in 2009110. The re-display of the Sainsbury Study Centre opened in November and has transformed the space, showcasing the history of Sainsbury's and including sections on the Sainsbury family, uniforms, advertising and the development of packaging since 1869. A new display of material from the Port and River Library and Archives includes letters by Ernest Shackleton and Captain Robert Scott relating to the British Antarctic Expeditions. The archives handled over 1300 enquiries and visits through the year and supported events with visitors such as the Historic Diving Society and Sainsbury's Veterans.
The focus for conservation and coliections care activities was primarily on completing the conservation and object installation of the 7,000 objects going on display in the new galleries. Over 300 objects were conserved for display in the War. Plague and Fire gallery. A range of other projects were also completed to improve the storage conditions for collections. A five year collections care plan was completed, the Museum's hazardous collections were reviewed and the Museum has implemented a pioneering technique called 'Integrated Pest Management' using detailed gallery and store plans to provide a more holistic approach and identify high risk areas.
PROGRAMMES AND LEARNING
Programmes The Museum continues to ensure the stories told in our galleries and programmes are interesting, relevant and recognisable for visitors from diverse backgrounds. This year saw the initiation of a new Community Collaboration and Inclusion Strategy which aims to integrate relevant activities within the core activities of the Museum. This aims to build on and develop the Museum's success in this area with new projects and priorities to be developed in the forthcoming year.
During 2009110 two key community-based projects have been delivered that have contributed content to the new Galleries of Modern London. Sculptures were created by a group of adult mental health services users in conjunction with Barnet College and by members of London's Chinese communities. working with the artist Hale Man. Alongside displays during the year, the London, Sugar and Slavery 12 Museum of London Annual Report and Financial Statements Year Ended 31" March 2010
HLF-funded community programme included the development of a one-person theatre piece based on Nanny of the Maroons, launched in March, which will feature regularly in the events programme.
As part of the Cultural Festival supporting London 2012, the Museum is involved in the nationwide Stories of the World programme. The focus of the Museum's major youth engagement project is 'place'; how people create a sense of place through the legacies they leave or inherit. In particular it will explore the continuing influence of the Romans. Major milestones during 2009110 included the recruitment of four partner museums that will deliver their own local youth engagement projects with support from the Museum. The second major milestone was the establishment of a youth panel called Junction which meets frequently throughout the duration of the project to ensure the projects and events effectively engage young people. Five youth engagement projects will be delivered next year.
Aside from community work using the galleries, the Museum has delivered a wide range of other projects. The London Archaeological Archive and Research Centre (LAARC) worked with the Museum's Archaeology division (MOLA) to deliver a community excavation in East London involving local school children and a Bengali women's group whilst the LAARC's Volunteer Inclusion Project (VIP) has continued to go from strength to strength. Three new cohorts started during the year, joining 77 volunteers that undertook a ten-week programme of training and work registering, recording, packing and archiving finds in the Archaeological Archive.
The Museum has continued to offer a varied and exciting programme of adult evenings catering for a range of audiences. Highlights have included East Words@ Late, an exciting poetry and spoken word event, tours of the Forward to Freedom exhibition led by people who were involved in the anti- apartheid movement, the Canary Wharf Film festival and an array of talks on wide ranging subjects from the use of leather in fire fighting equipment during the 17th century to 1980s power dressing. The 'in conversation with' events with Robert Elms continued to draw good numbers throughout the year, featuring Londoners such as Diane Abbott and Shami Chakrabati.
The Museum contributed to several cultural festivals throughout the year. In June the Museum delivered a range of 15 events as part of the Mayor's Stow of London festival. A highlight of this was the Great Museum Marathon event where a team performed the entire history of London non-stop from the year 1000 to 2009, starting at 10.00am and ending at 20.09pm, a tag team of curators, speakers and performers on stage for 15 minutes each. The event attracted 1300 people over more than 10 hours.
Learning
Schools Performance (includes onsite, offsite, facilitated and self-directed visits) , -""". ." -"--. .- .-..J-. - - - -. - - Museum of London 1 67,653 1 60,000 1 65,040 Museum of London 1 28.952 1 22.000 1 34.473 I Docklands
Learning has continued to be at the heart of the Museum with new programmes developed to meet the needs of an evolving National Curriculum and to respond to national life-long learning, diversity and inclusion agendas. The number of schools visits exceeded targets across both Museums with over 96,000 visits. The rise in numbers at Museum of London can be attributed to the quality of the schools programming, as figures exceeded the previous year at every quarter, further boosted by the opening of the Clore Learning Centre in September. Figures at Museum of London Docklands were significantly above target although lower than the record 2008109 results that were due to the major Jack the Ripper exhibition. Overall school numbers have continued to grow at Museum of London Docklands reflecting the popularity of the London, Sugar and Slavery gallery. Membership of the Teachers Network e-news exceeded 1,000 which had been the long term target since it was established four years ago.
Examples of the many new programmes developed include Tudor Dance and Society, launched in October for primary schools using the new learning spaces, and the Hands on History sixth form sessions which involved students creating a virtual exhibition in the new e-learning studio. Schools outreach work included a revised ASBO! session delivered to over 700 secondary school students and during Black History Month outreach sessions on the pioneering nurse Mary Seacole proved popular. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
The London's Calling performance on London's Black History reached 5,000 students and 200 teachers. Special Educational Needs (SEN) continued to be met through the Museum's innovative learning programme and demand for SEN sessions exceeded supply throughout the year. At Museum of London Docklands a new SEN project was piloted in the May half term - Songs of the Sea - a story telling based activity in partnership with the Stephen Hawking Schools, for children with severe learning disabilities. New online SEN resources were also developed.
A wide range of family activities and events were delivered throughout the year. The Easter programme at Museum of London used themes of Food and Victorian Children and attracted over 1,500 visitors whilst Christmas events took the theme of celebration, with storytelling about the coronation of Queen Elizabeth II, and Victorian Christmas tree decorations. Docklands events included Living Ancestors story-telling sessions linked to the display in the galleries and another successful Dockers' Day, further strengthening our relationship with the Tower Hamlets Dockers' Club. The Museum actively seeks to find new audiences and to engage hard-to-reach families. Under 5s outreach was begun with a local refuge for young mothers and family outreach sessions were delivered in boroughs of Sutton and Merton. At Docklands a Bengali fathers group visited and well attended programmes of events for Bengali New Year and Chinese New Year featured arts, dance and story telling.
Adult learning is a key development area for the Museum. The Museum is growing this area of work through a partnership model, developing strong relationships with both adult education and higher education providers. Seven Birkbeck courses were offered during the academic year and a fourth Shared Learning Project at LAARC was begun with the University of the Third Age in September. The numbers of adults attending evening classes and other courses grew impressively during the year, reflecting the work on developing new courses, both academic and practical. A ten week course delivered by the Museum's osteology experts using the human osteology collection was fully booked with a waiting list and received excellent feedback. Work began to develop sessions, tours and online resources for pilot ESOL sessions (English for Speakers of Other Languages) in partnership with Southwark College. e-learning is a key part of the learning programme delivered through the Clore Learning Centre with over 1,700 people using the e-learning studio in its first quarter. 2009110 saw the development of an e- learning strategy and programme that includes family sessions, new schools sessions and adult courses. The first adult ICT community project, delivered in partnership with the City of London, was an introduction to computing for older people using the Museum's galleries and collections as inspiration. e-learning uses a range of technology from computers and digital cameras to Playstation Portables that can be used in and around the galleries.
ARCHAEOLOGY TRADING SEVICES
Museum of London Archaeology (MOLA), our commercial heritage services practice, delivered strong results this year in the context of a very tough economy. All of MOLA's income is earned from property sector clients, who procure our advice and professional services in support of their planning applications and development schemes - and the recession hit the property sector particularly hard last year. The management team commitment was to ensure profitability despite a lower overall volume of work. The financial performance is a credit to the staff who, throughout the year, demonstrated their dedication and resilience, especially as a large part of the workforce faced a prolonged period of uncertainty over job security.
We are therefore delighted and proud that the MOLA team put in such a strong performance, with revenue at E7.lm for the year, which was 20% down on 08109 but 31% better than planned. Margins remained fairly constant at 26% (27% 08109) and profit on the year's trading returned 4%. The reversal of the unused element of the previous year's redundancy provision (as only 13 of 63 staff at risk were made redundant) put back over E250k giving a profit of E540k before allocation of central support costs. Throughout the year cash collections remained strong and the bank baiance closed at E1.4m, which was f20k up on the start of the year even after repaying f1.4m against a liquidity loan, inter- company charges and a contribution to the Museum of London. The order book is also stronger at over Elm more than for the same time last year. On average, MOLA numbered around 160 staff including archaeologists and specialists during the year.
2009110 was therefore seen as an opportunity for consolidation, with a focus on both managing the business during recession and developing the business for future growth. Internally, great progress 14 Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
was made with information systems: work began on a new client relationship management database for the sales and contract management team; a new Global Positioning System was introduced by the geomatics team; and we completed a major upgrade to our Geographic lnformation System -which will revolutionise future research by enabling us to analyse different types of find and information across many different archaeological sites. A major change was introduced by collective agreement to increase contractual hours of work for no extra pay - a move which considerably improved MOLA's competitive ability. MOLA is a Registered Organisation with the Institute for Archaeologists and this year also became an accredited member of the Construction Health and Safety Scheme and initiated accreditation in Quality Assurance and Environmental Quality.
Externally MOLA secured a number of notable new contracts. We were appointed to the Framework Panel for the construction of Crossrail. We began work on Thameslink for Network Rail - a major project involving intensive evaluation and excavation around Borough Market in Southwark and Blackfriars. Important remains of Roman and medieval London were recovered, and some of the finds were quickly shared with the public in the Museum's galleries at London Wall. We completed a major excavation at Marshall Street in Westminster; one of the iargest excavations of a post-medieval cemetery in London, with remains from the 18th century workhouse cemeteries of St James Piccadilly and an earlier 'Pest House' burial ground. Over 2,000 individuals were excavated and the analysis will make an invaluable contribution to contemporary understanding of diet, poverty, disease and urbanism. At Riverbank House in the City of London, the remarkable remains of over 20 metres of the Roman riverside wall were discovered beneath the Upper Thames Street pavement. This was one of the best preserved sections seen for at least 30 years; timber samples from beneath the wall may help to date its construction and the demise of the Roman port.
At 20 Fenchurch Street, City of London, the site where the Cheapside Hoard was discovered in 1912, we completed the third and final phase of excavation and revealed extensive evidence for 1st and 2nd century Roman timber buildings and roads close to the area of the military camp or fort discovered at Plantation Place some years ago. At Crosby Square, City of London, excavation revealed traces of the early and later Roman City of London. In Oxford, MOLA began work at the site of the Radcliffe Infirmary, where an important prehistoric landscape with ring ditches and inhumations was revealed. At Bath the final phase of fieldwork focused on the underlying prehistoric landscape from around 5,000BC up to the Roman period. MOLA staff also appreciated the chance to contribute to internal programmes, such as the Big Dig in Docklands, which received very positive feedback about the 'real archaeologists' involved with the teaching.
At Upper St Martin's Lane, remarkable evidence of urban habitation in the 5th and 6th centuries was discovered - a critical period between the end of Roman administration and the arrival of the Saxons. Recent research is beginning to identify the tentative signs of continuity between a late Roman presence based around St Martin's in the Fields and the mid-Saxon settlement of Lundenwic at what is now Covent Garden. The completion of work for the East London Line was marked with the publication of "Tracks Through Time", a popular account of the archaeological discoveries - including the remains of Holywell Priory - which featured in Transport for London's travelling exhibition about the project. The substantial remains of an 18th century watermill with sluice gates and the housing for a massive, 15-foot waterwheel, cofferdam and pump house were found at 150 Stratford High Street. And, marking the end of five years of fieldwork on one of the iargest sites ever investigated at one time, MOLA with its project partners PCA completed site work on the site of the Olympic Park in the Lea Valley.
MOLA's international reputation for academic analysis and archaeological publication received a further boost in award ceremonies: we won the SCOLA prize for the MOLA popular book From Ice Age to Essex: a history of the people and landscape of East London, and a high commendation for The London Guildhall: an archaeological history of a neighbourhood from early medieval to modern times, at the British Archaeological Awards. Of the eight MOLA imprint volumes produced during the year, two were launched formally: the volume on Shakespeare's playhouses was launched at the new Globe Theatre and the final volume on excavations at Mucking was launched at the Society of Antiquaries in Burlington Square. MOLA staff also published in academic, science and popular journals and authored a good practice guide for the Construction Industry Research and lnformation Association (CIRIA) on archaeology and development. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
PLANS FOR FUTURE PERIODS
The Museum's strategic objectives were reviewed and refreshed as part of the 2010/11 planning process and for 201011 3 will be:
A: To play a significant cultural role in London B: To raise our profile and engage wider audiences C: To develop our reputation for Learning D: To ensure we are operationally and financially efficient and sustainable
Galleries of Modern London In 2010/11 the new Galleries of Modern London open to the public. A comprehensive programme of launch activities and a major marketing campaign will be delivered in the preceding months to reposition the Museum as a revitalised destination. The new Collections Online system will be launched in both the new galleries and via the Museum's website, providing significantly improved digital access to the Museum's collections. New online learning resources and learning programmes will be developed to maximise the opportunities of the new galleries.
Roman Gallery The Museum will formally begin work on its next major project, the completion of a new Roman Gallery with opening currently scheduled for 2014. The project team will be established and further work will be completed to scope the physical design of the gallery and progress developing its themes and content.
Exhibitions Programme The Museum will return to delivering a regular programme of temporary exhibitions across both sites. The coming year will see Girl Guiding at Museum of London Docklands and The Streets of London, based on the Museum's extraordinary collection of street photography, at Museum of London whilst major exhibitions on pirates, Dickens and the history of medicine and anatomy are planned from 201 1 onwards.
London 2012 The Cultural Festival for London 2012 will provide a range of opportunities for the Museum. The Museum will continue to deliver the Stories of the World youth engagement project, which is the Museum's official Olympics project, working with four partner museums alongside strategies to 'collecl the Olympics and maximise commercial opportunities through major exhibitions and corporate hire.
Capital lmprovements The commercial offer at the Museum will continue to improve and expand with the addition of a bar and restaurant, London Wall, which will be launched onsite to coincide with the new galleries whilst the Terrace Rooms will undergo a major refurbishment before reopening for corporate hire in Autumn 2010. lmprovements will continue to be made across the Museum's buildings Including replacement of the main roof and a phased office reorganisation,
MOLA Another difficult year is expected for MOLA in 2010/11 with the continuing impact of recession in the construction sector coupled with increased competition. Consequently MOLA are targeting a similar revenue to 2009110 with a slow first quarter expected and a ramping up of the business in the second half of the year. Additionally MOLA are looking to develop archaeological services regionally by the end of the financial year.
FINANCIAL REVIEW
The results for the year are set out on the Statement of Financial Activities on page 24.
Total Group Incoming Resources were f28,456k during the year (2009: f29,278k). This small decrease In income is attributable principally to the reduction in income from the archaeological trading services. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
The Museum's main sources of funding were the Greater London Authority and the City of London Corporation, which contributed 85% of the group's voluntary funding. Archaeology trading income accounted for 25% of the Group's total income. Other grants and donations included f 1.5117from the MLA towards the London Museums Hub. Group expenditure on charitable activities decreased by 10 % over 2008-09, due to the reduced activity within archaeology trading services.
On IApril 2009, the Museum of London was amalgamated with the Museum of London Docklands, the latter museum having been operated, up to that point, through a subsidiary company within the Group. The Museum of London recorded an operating surplus (before transfers) on its unrestricted free reserves (general fund) of f1,995k (2009: f806k). After transfers from restricted and designated funds and other gains, the Museum of London's total free reserves stood at f5,418k at 31.3.10 (31.3.09: f4,200k combined free reserves of Museum of London and Museum of London Docklands).
The group's cash balances and cash flow forecast remain adequate for its needs provided there Is no major change in its core funding arrangements after the end of the CSR 2007 period (ends March 2011). Total group funds carried forward at 31 March 2010 are f26,302k (2009: f35,723k). There remains a significant deficit on the pension fund of f24,107k (2009: deficit of f 10,823k) which is disclosed in accordance with Financial Reporting Standard 17. See note 19 for further details. This significant increase in the deficit is almost entirely attributable to actuarial losses of f13m. The Museum's pension contribution rates are reviewed every three years, after an actuarial valuation in which the surpluses and deficits may be measured differently to the FRS17 valuation, in accordance with the Museum's accounting policy as described in note l(k). A triennial actuarial valuation was reported in January 2008 and showed a surplus on the fund which was reflected .in lower contribution rates from 1 April 2008. However under current market conditions it is unlikely that this will be the position at the next triennial valuation due as at March 2010.
INVESTMENT POLICYAND PERFORMANCE
The capital funds of the Trust Funds are invested in Common Investment Funds. The amounts invested are divided between equity funds and fixed interest funds to provide a satisfactory balance between income and capital growth. Targets are not set but the Trustees of the funds periodically review the performance of the investments to ensure the returns are satisfactory.
During the year to 31 March 2010 the unrealised losses to the capital value of the Museum of London Trust Funds that were recorded in the preceding year, as a result of the economic downturn, were almost fully recovered. Total income received over the period was in line with receipts in previous years.
Available cash balances held by the Museum of London and its subsidiary undertakings are placed within the City of London Corporation's account and with Lloyds Bank.
GOING CONCERN
There are a number of current external financial issues affecting the Museum. These, together with the Governors' assessment of their impact on the Museum, and with the actions being taken to ensure that none of them can individually or collectively destabilise the business, are shown below.
Issue Potential Effect Response Global economic crisis and the Potentially damaging impact on The Museum has put in place a associated downturn in the the finances of the archaeology robust planning and monitoring property market, in particular in division MOLA which is heavily system at MOLA, with clear London reliant on a buoyant property trigger points to allow Governors develo~mentmarket to take prompt action to prevent significant financial losses
Global economic crisis and its The government may cut The Museum has confirmed impact on government spending funding to the ArtslHeritage funding up until the end of sector. The grant paid to the March 201 1 which it appears Museum could be cut will not be overturned. A number Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
substantially. of scenarios are being modelled to deal with the impact of future / public funding cuts Decline in the value of 1 Largely-. immateriai / Acauisitions expenditure will be investments and the returns scaled back accordingly thereon
On the basis of the above, Governors are of the opinion that there are no significant unmanageable financial risks and that the accounts are properly prepared on the going concern basis.
RESERVES POLICY
The Reserves Policy underpins the Museum's Strategic Plan and Strategic Objectives 2010-13 and establishes the financial parameters within which the long-term delivery of our mission and objectives can be achieved.
The Board has adopted a Reserves Policy which is based on the evaluation of major risks facing the Museum and which is reviewed by the Board annually. The objective is to provide a level of unrestricted reserves that will minimise the impact to Museum services, should any of the risks materialise, but that does not fully cover all of the main risks as the Board believes that this would provide an unreasonable level of excess reserves. The Board has identified the following as its main risks.
The Museum:
Fails to raise sufficient sponsorship to complete the Capital City project and instead must find the balance from general funds Fails to generate satisfactory revenues from its activities Fails to secure sufficient grant income as a result of the next Comprehensive Spending Review for both the Museum and the Renaissance London Programme Suffers a sudden failure of building structure or major plant requiring immediate attention in order to continue operations Suffers the costs of further restructuring at MOLA should the property market continue to be depressed Restructures operations should the grant in aid be substantially reduced Suffers loss of assets as a result of fraud Fails to respond appropriately to an act of terrorism or major emergency at alllany of the Group sites, causing a fall in income andlor loss of reputation
The Board believes that a general reserve of approximately £4 million is an appropriate sum to hold against the financial consequences of the above potential risks. As at 31 March 2010 the balance on the Museum of London's general funds (as shown in note 16 -General Funds - Museum of London) stood at f5.4m (excluding fixed asset and unrestricted pension reserves). This represents approximately five months of operating costs (excluding depreciation, cost of sales and fully funded projects).
The Museum has a designated Fixed Asset Reserve equating to the net book amount of tangible fixed assets that have not been funded by loans, to reflect the fact that some unrestricted funds are utilised to finance fixed assets and are thus unavailable for working capital. STRUCTURE OF THE ACCOUNTS
The Museum accounts consist of the following statements, which include comparative figures for the previous year.
Consolidated Statement of Financial Activities showing all incoming resources and all expenditure incurred and reconciling all changes in the funds of the Museum and its subsidiary undertakings. Museum of London Annual Report and Financial Statements Year Ended 31'' March 201 0
Consolidated Balance Sheet setting out the assets and liabilities of the Museum and its subsidiary undertakings. Museum of London Balance Sheet setting out the assets and liabilities of the Museum. Consolidated Cash Flow Statement that summarises the movement of cash for the year for the Museum and its subsidiary undertakings. Notes to the financial statements explaining the accounting policies adopted and information contained in the statements.
The financial statements have been prepared in accordance with the Statement of Recommended Practice SORP 2005: Accounting and Reporting by Charities and applicable accounting standards in the United Kingdom.
On 1 April 2009, the Museum of London was amalgamated with the Museum of London Docklands. The following assets, liabilities and funds were transferred from the Museum of London Docklands to the Museum of London:
Net Assets f'000 Funds employed E'000 Tangible fixed assets 9,040 Restricted funds 8,818 Net current liabilities (1,696) Unrestricted funds (1,823) Long term liabilities (349) 6,995
All assets and liabilities were transferred at book value, in accordance with the provisions for group reconstructions contained in paragraph 13 of FRS6 Acquisitions and Mergers
EMPLOYEES POLICY
The Museum's policy is to consider all job applications in line with its diversity and equal opportunities policies and to make reasonable adjustments to working conditions to support the employment of people with disabilities. The Museum is committed to the principles of the Guaranteed Interview Scheme and interviews all applicants with a disability who meet the minimum criteria for the post. The Museum treats all staff in accordance with its diversity and equal opportunities policies in respect of reward, career development, training opportunities and promotion.
A series of management and staff briefing meetings are held Museum-wide, divisionally and departmentally on a regular basis. E-mail is used Museum-wide for the communication of objectives and to invite feedback. Employees are subject to annual objective setting by their Head of Department in accordance with the Board's objectives as outlined in the Strategic Plan. On a more formal basis the Museum meets regularly with the recognised Trade Unions for the purpose of negotiation, consultation and communication.
To support the retention of key staff the Museum will continue to carry out a range of HR initiatives including the ongoing review of its terms and conditions of employment and implementing a strategy for learning and development across the organisation that aligns learning with organisational objectives. In addition, the Board has tasked the management team with achieving Investors in People accreditation, during the time-span of the 2010/11 business plan.
RISK MANAGEMENT AND INTERNAL CONTROL
PURPOSE OF THE SYSTEM OF INTERNAL CONTROL
The system of internal control is designed to manage risk to a reasonable level rather than eliminate the risk of failure to achieve policies, aims and objectives. The system can therefore only provide reasonable and not absolute assurance of effectiveness.
The system of internal control is based on an ongoing process designed to identify and prioritise the principal risks to the achievement of Museum's policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised and to manage them efficiently, effectively and economically. Museum of London Annual Report and Financial Statements Year Ended 31"' March 2010
The system of internal control has been in place in the Museum of London and its subsidiary undertakings during the year ended 31 March 2010 and up to the date of approval of the annual report and accounts.
CAPACIN TO HANDLE RlSK
The Museum of London Group has a structured risk management process as detailed in the Risk Management Policy and Strategy. The Director has the ultimate responsibiiity for promoting and embedding this policy and strategy.
Each divisional director has responsibiiity for the identification and assessment of risks within their division and for ensuring that these are managed appropriately.
The Group Director of Finance and Corporate Services provides advice and support to the Museum of London Group on the risk management strategy, policy, framework and processes. The Museum of London uses the internal audit unit of the City of London Corporation, which operates in accordance with local government internal audit standards as laid down in the ClPFA code of practice. The work of the internal audit unit is informed by an analysis of the risk to which the Museum is exposed, and annual internal audit plans are based on this analysis. The analysis of risk and the internal audit plans are endorsed by the Museum's Audit Committee. At least annually, the Chief Internal Auditor provides the Audit Committee with a report on internal audit activity in the Museum. The report includes the Chief Internal Auditor's independent opinion on the adequacy and effectiveness of the Museum's system of internai control and corporate governance, for those reviews performed in the financial year.
Following the major fraud referred to in Note 7, the Museum commissioned a review by specialist fraud consultants and has implemented their recommendations to tighten the internal control framework.
RlSK AND CONTROL FRAMEWORK
The Museum's Risk Management Policy and Strategy explains the organisation's approach to risk management; provides risk definitions; raises awareness of the principles and benefits involved in the risk management process; identifies the main reporting procedures and promotes good risk management practice in the Museum of London Group. Embedding of risk management within the Group is generally sound but continues to progress. Further work is always required, when personnel and priorities change, to ensure that this continues to be part of all the operations of the organisation.
The Risk Management Policy and Strategy sets out the risk assessment process whereby risks are identified and included within the risk register according to the category of risk and the likelihood and impact of the risk event occurring.
These identified risks are controlled through the system of internal control which is based on a framework of regular management information, administrative procedures including the segregation of duties, and a system of delegation and accountability. In particular, it includes:
an organisational structure with clear accountability and levels of authority; comprehensive budgeting systems with an annual budget and five year rolling financial plan that are reviewed and agreed by the Board of Governors; regular reviews by the Board of Governors of periodic and annual financial reports which indicate financial and operational performance against plans and forecasts; setting targets to measure financial and other performance; clearly defined review procedures for proposed capital investments; as appropriate, formal project management disciplines.
The Risk Management Policy and Strategy establishes a risk reporting programme as follows:
Strategic risks are reported to and reviewed by the Board of Governors at least once per year and at least twice per year by the Audit Committee and Directorate. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
Operational risks are regularly reviewed by the Directorate, heads of department, project managers and other senior managers as appropriate. They are reported to and reviewed by the Audit Committee twice per year and Directorate three times per year and by departmental team meetings quarterly.
REVIEW OF EFFECTIVENESS
The effectiveness of the system of internal control is reviewed by the Audit Committee who meet at least twice a year and report their findings to the full Board. Their work is informed by the work of the internal auditors, the executive managers within the Museum who have responsibility for the development and maintenance of the control framework, and comments made by the external auditors in their management letter and other reports.
STATEMENT OF GOVERNORS' RESPONSlBlLlTlES
Under the provisions of the Museum of London Acts 1965 and 1986, the Museum is an exempt charity, however the accounting requirements are not specified in this legislation. Accordingly, the Charities Act 1993 Section 46 is applicable to the Museum. This section states that the trustees of an exempt charity shall keep proper books of account with respect to the affairs of the charity.
The Governors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The law applicable to charities in England & Wales requires the Governors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the Board of Governors required to:
select suitable accounting policies and then apply them consistently; observe the methods and principles in the Charities SORP; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
The Governors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 1993, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Governors are responsible for the maintenance and integrity of the charity's website
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
ADOPTION OF REPORT AND FINANCIAL STATEMENTS AdoP ted and signed for and on behalf of the Board of Governors
hairman of the Board of Governors of The Museum of London
6 October 2010 21 Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
INDEPENDENT AUDITORS' REPORT TO THE TRUSTEES OF MUSEUM OF LONDON
We have audited the financial statements of The Museum of London for the year ended 31 March 2010 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Parent Charity Balance Sheets, the Consolidated Cash Flow Statement, and the related notes. The financial statements have been prepared under the accounting policies set out therein.
Respective responsibilities of trustees and auditors
The trustees' responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and united Kingdom ~ccounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Trustees' Responsibilities.
We have been appointed as auditors under section 43 of the Charities Act 1993 and report in accordance with regulations made under that Act. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the charity's trustees as a body in accordance with Regulation 24 of The Charities (Accounts and Reports) Regulations 2008 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true and fair view and are prepared in accordance with the Charities Act 1993. We also report to you if, in our opinion, the information given in the Annual Report is not consistent with those financial statements, if the charity has not kept sufficient accounting records, if the charity's financial statements are not in agreement with these accounting records or if we have not received all the information and explanations we require for our audit.
We read the other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. The other information comprises only the Trustees' Annual Report and the other information listed on the contents page. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the trustees in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's and the charity's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
Opinion
In our opinion:
the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of affairs of the charity as at 31 March 2010 and of its incoming resources and application of resources, including its cash flows, for the year then ended; and
the financial statements have been prepared in accordance with the Charities Act 1993
PricewaterhouseCoopers LLP Chartered Accountants and Statutoty Auditors London 3 OA~2010 Date.. .. .r ...... Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
MUSEUM OF LONDON GROUP CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES
Expressed in £000 2010 2009 Notes Unrestricted Restricted Permanent Total Total Funds Funds Endowment Funds Funds
INCOMING RESOURCES lncoming resources from generated funds Voluntary income Activities for generating funds investment income
lncoming resources from charitable activities Archaeology trading Other
Totai lncoming Resources
RESOURCESEXPENDED Cost of generating funds Costs of aeneratina- - volunta~ 7 709 107 816 827 income Fundraising trading 7 1,749 - 1,749 1,576 2.458 107 - 2,565 2,403
Charitable activities Governance costs Exceptional item
Total Resources Expended
Net incoming resources before transfers
Transfer between funds 16 (a) 7,070 (7,070)
Other recognised gainsliosses Gains/(iosses) on investment assets 12 251 34 1 592 (664) Actuarial gains/(iosses) on defined 19 (12,980) - (12,980) 249 benefit pension schemes
Net movement in funds (8,153) (3,609) 341 (9,421) 410
Funds brought forward 20,235 14,589 899 35,723 35,313
Funds carried forward 16 (a) 14,082 10,980 1.240 26,302 35,723
There are no other gains or losses other than those recognised above and therefore no separate statement of total gains and losses has been prepared. All activities derive from continuing operations.
The notes on pages 29 to 48 form part of these financial statements 24 Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
MUSEUM OF LONDON GROUP CONSOLIDATED BALANCE SHEET
Expressed in £000 Notes 2010 2009
Fixed assets Heritage assets Other tangible assets
investments
Current assets Stock Long term contracts Debtors Cash at bank and in hand
Current liabilities Creditors failing due within one year 14
Net current assets
Total assets less current liabilities 64,283 61,116
Creditors falling due after one year City of London Corporation
Provisions
Net assets excluding pension liability
Pension liability
NET ASSETS
FUNDS
Permanent endowment Restricted funds Unrestricted funds
TOTAL FUNDS
The financial statements were approved by the Board of Governors on 6 October 2010
I Signed on its behalf by
Director an of the Board of Governors
The notes on pages 29 to 48 form part of these financial statements Museum of London Annual Report and Financial Statements Year Ended 31" March 2010
MUSEUM OF LONDON BALANCE SHEET
Ex~ressedin EOOO Notes 2010 2009
Fixed assets Heritage assets Other tangible assets
Current assets Stock Long term contracts Debtors Cash at bank and in hand
Current liabilities Creditors falling due within one year
Net current assets 5,880 11,569
Total assets less current liabilities 61,764 51,901
Creditors falling due after one year City of London Corporation
Provisions
Net assets excluding pension liability
Pension liability
NET ASSETS
FUNDS
Restricted funds Unrestricted funds
TOTAL FUNDS 16 23,783 26,836
The financial statements were approved by the Board of Governors on 6 October 2010
Director Chairman of the Board of Governors
The notes on pages 29 to 48 form part of these financial statements Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
CONSOLIDATED CASH FLOW STATEMENT
Expressed in EOOO 2010 2009
Net cash inflow from operating activities Returns on investment and servicing of finance Interest and dividends received interest paid
Capital expenditure and financial investments Payments to acquire tangible fixed assets
(Decrease) in cash and cash equivalents before financing (1,898) (173)
Financing (Decrease)/increase of bank overdrafts Repayments of long-term borrowing
Decrease in cash and cash equivalents in the year
Summary of movement in cash and cash equivalents
EXPRESSED IN EOOO BALANCE MOVEMENT BALANCE 1 APRIL 2009 IN THE YEAR 31 MAR 2010
Cash at bank & in hand Total cash and cash equivalents Museum of London Annual Report and Financial Statements Year Ended 31" March 2010
NOTES TO THE CASH FLOWSTATEMENT
1) RECONCILIATION OF NET INCOMING RESOURCES TO NET CASH INFLOW FROM OPERATING ACTIVITIES
EXPRESSED IN EOOO 2010 2009
Net incoming resources 2,967 825
interest and dividends receivable interest payable Pension liability: movement net of actuarial gains Depreciation Net Operating Income
Increase in stock (62) (33) Decrease in debtors and long term contracts 2,278 5,621 Decrease in creditors (excluding loans/overdrafts) (737) (563) (Decrease)/increase in provisions ($36) 299 Net cash inflow from operating activities 7,940 9,917
2) ANALYSIS OF MOVEMENT IN NET DEBT
EXPRESSED IN EOOO BALANCE MOVEMENT BALANCE 1 APRIL 2009 IN THE YEAR 31 MAR 2010
Cash at bank & in hand Bank overdrafts Long term borrowing
Total Museum of London Annual Report and Financial Statements Year Ended 31" March 2010
NOTES TO THE FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
A) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements have been prepared under the historical cost accounting convention, with the exception of investments which have been included at market value, and comply with the Charities Act 1993 as amended by the Charities Act 2006, the Statement of Recommended Practice Accounting and Reporting by Charities (SORP) 2005 and applicable accounting standards in the United Kingdom.
Consolidated accounts have been prepared for the Museum, which consolidate the financial statements of the Museum of London, the Museum in Docklands (dormant company from April 2009), Museum of London (Trading) Limited, the London Museum Fund, the Joicey Fund and the Mackenzie Bell Fund on a line by line basis.
B) INCOMING RESOURCES
All income is accounted for on a receivable basis. Grant income is recognised as income when the conditions for its receipt have been met. Income from long term contracts is accounted for in accordance with 1J below.
C) RESOURCES EXPENDED
Expenditure is classified under the principal categories of the cost of generating funds (costs of activities that are not in themselves charitable but which are incurred to generate income to support charitable activities), charitable activities (costs incurred in furtherance of the charity's objectives) and governance costs (costs in connection with the constitutional and statutory requirements of the Museum).
Within the costs of generating funds are the costs of generating voluntary income and fundraising trading: costs of goods sold and other costs. The costs of generating voluntary income are the costs of fundraising and the costs of administering the Museum's 'Friends' scheme. Fundraising trading costs relate to the Museum shops, event hire and catering.
Expenditure incurred on charitable activities is subdivided into communications, programmes and learning (adult, family and schools education programmes), galleries and exhibitions, collections (conservation and curation) and archaeology trading.
Categories of expenditure include direct and indirect costs. Where costs cannot be directly attributed, they have been allocated to activities on a basis consistent with their use of the resources.
Pension financing costs, arising from changes in the net of the interest costs and the expected return on assets, have been apportioned across the expenditure categories on the basis of the number of pensionable employees.
Financing costs relating to interest payable on loans are included in the building maintenance category for purposes of apportionment as the loans are for building improvements.
As detailed in note 8, support costs comprise finance, administration, human resources, information technology, directorate and some premises costs.
Support costs are apportioned across the resources expended categories on a basis consistent with their use of the resources, principally by reference to staff head count.
Resources expended are accounted for on an accruals basis Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
D) IRRECOVERABLE VAT
Irrecoverable VAT is charged as an expense apportioned across expenditure categories pro-rata
E) FUND ACCOUNTING
The Museum's financial statements comprise a number of individual funds that divide into distinct categories. These are defined below.
General funds are unrestricted funds and comprise revenue balances that have arisen and are available for use at the discretion of the Board of Governors in furtherance of the general objectives of the Museum. The London Museum Trust (income element) is also a general fund, which, although the responsibility of a separate Trust, is available for the general objectives of the Museum.
Designated funds are also unrestricted and comprise funds that have been set aside at the discretion of the Board of Governors for specific purposes. Funds representing the net book value of the tangible fixed assets of the Museum not funded by loans are transferred to a designated fund to the extent that sufficient general funds are available.
Restricted funds are subject to specific restrictions imposed by the donor and include grants and donations for Museum of London major projects, Mackenzie Bell Trust and the Joicey Trust (income element).
Permanent endowment fund - Joicey Trust and London Museum Trust are trust funds in which the donor has provided that the capital cannot be converted to income (London Museum -except by the approval of the Board of Governors)
F) FIXED ASSETS
Heritage Assets
The value of the Museum's collection is considered to be incalculable. Under SORP 2005 historic collections need not be capitalised if reliable cost information is not available or significant costs would be involved compared with the benefit obtained. As a result collection items acquired before 1 April 2001 have not been capitalised in these financial statements. Subsequent purchased historic and inalienable assets are capitalised where the cost is greater than £3,000. Items in the collection that are capitalised are stated at cost but are not depreciated as the amount of depreciation is regarded as immaterial due to their anticipated high residual value. This is confirmed by an annual impairment review.
Tangible Assets
Tangible Fixed assets are stated at cost. All tangible assets with a cost of greater than £3,000 are capitalised and depreciated on a straight-line basis to write off the cost over their expzcted useful lives. Assets under construction are depreciated from the year of completion. From 1 April 2001 historic artefacts and inalienable assets purchased, with a value of over £3,000 have been capitalised. No depreciation is charged on these items.
Buildings, improvements, renovations and Over 5-99 years; the shorter of the expected useful extensions life and the length of the lease.
Furniture, equipment, vehicles and plant Over 4 years (25%) or the asset's expected useful life if shorter.
Assets under construction No depreciation is charged until completion.
Historic artefacts and museum exhibits No depreciation is charged on acquired historic artefacts. Museum exhibits are depreciated over the expected life of the exhibit, typically 10 years.
Impairment reviews of tangible fixed assets are carried out in accordance with operational needs. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
G) INVESTMENTS
Investments are valued annually at the middle market price at the balance sheet date. The unrealised profit or loss on investments is shown on the Consolidated Statement of Financial Activities.
H) STOCK
Stock consists of purchased goods for resale and is valued at the lower of cost and net realisable value.
I) RECOGNITION OF LIABILITIES
Liabilities are recognised when an obligation arises to transfer economic benefits as a result of past transactions or events.
J) LONG TERM CONTRACTS
Long-term contract balances are classified under the balance sheet heading of current assets. These are stated at the lower of cost and net realisable value. This is calculated as total costs incurred net of amounts transferred to the statement of financial activities in respect of work carried out to date, less foreseeable losses and applicable payments on account.
For payments on account any residual balance in excess of the balance on that contract in long term contracts is classified as "payments received in advance" within creditors.
The outcome of the long term contracts cannot be assessed with reasonable certainty before the conclusion of the contract. Therefore in accordance with SSAP 9, if no loss is anticipated, turnover relating to incomplete contracts is recognised as costs are incurred. Profit in respect of these costs is recognised at the point at which an invoice is raised to the client. Turnover which has been recognised but not invoiced is recognised at cost only.
K) PENSION COSTS
The Museum's employees are eligible to contribute to the Museum of London Staff Pension Fund (the Fund), which is part of a multi-employer defined benefit scheme called the City of London Corporation Pension Fund, administered under the regulations of the Local Government Scheme.
Charges are made to the income and expenditure account based on the recommendations of the Fund's actuary. They are applied between the Fund's triennial valuations so as to include the expected cost of providing pensions on a systematic and rational basis over the period during which the Museum derives benefit from the employees' services.
The current service cost of the defined benefit scheme is charged to employee costs over the anticipated period of employment. Net pension finance income or costs are included immediately in employee costs. Actuarial gains and losses are recognised immediately on the face of the SOFA. A provision for the scheme deficit is shown on the face of the balance sheet. The amounts charged to the SOFA for defined contribution schemes represent the contributions payable in the period.
L) RESULTS OF THE MUSEUM OF LONDON (PARENT BODY) The Museum has taken advantage of paragraph 397 of the Statement of Recommended Practice Accounting and Reporting by Charities (SORP) 2005 which absolves charities preparing consolidated accounts from the need to publish a Statement of Financial Activities for the parent body. The results of the Museum of London (excluding subsidiary undertakings) for the year ended 31 March 2010 were: total incoming resources f27.8m (2009: £27.2m), total resources expended £24.81~1(£25.lm), net decrease in funds (afler transfer of net assets from subsidiary and actuarial losses) was £3m (2009: net increase of f2.3m). Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
2) CONSOLIDATION OF SUBSIDIARY UNDERTAKINGS
The Joicey Trust, Mackenzie Bell Trust and London Museum Trust all have objects which are exclusively to provide funds for the Museum of London and Trustees who are appointed by the Museum of London. They are therefore treated as subsidiary charities in accordance with Charities SORP 2005.
In a Memorandum of Understanding dated 20 February 2003, the Governors of the Museum of London and the Trustees of the Museum in Dockiands (a charitable company, limited by guarantee) agreed a management structure which gave the Museum of London the right to exercise a dominant influence over the Museum in Docklands and its subsidiary Museum in Docklands (Trading) Limited. These entities were therefore considered to be subsidiary undertakings. On 1 April 2009, all assets and liabilities of the Museum in Dockiands were transferred to the Museum of London and the subsidiary company became dormant. The Museum in Docklands (Trading) Limited became a wholly owned subsidiary of the Museum of London, and was renamed Museum of London (Trading) Ltd. The Museum of London has a £2 interest in the Company.
The results of the subsidiary entities for the year ended 31 March 2010 were as follows:
Incoming resources 25 40 22 - 1,143 1,230 2,416 Resources Expended (11) (1 ) (40) - (1,143) (1,195) (3,663) Net incomingl(outgoing) resources 14 39 (1 8) 35 (1,247) Unrealised gainl(ioss) on 179 251 161 591 (664) investments
Net movement in funds 193 290 143 626 (1,911) Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
The assets, liabilities and funds of the subsidiary undertakings as at 31st March 2010 were as follows:
Net Assets Tangible fixed assets Investments Current assets Current liabilities Long term liabilities
Total net assets
Funcis employed Permanent endowment Restricted funds Unrestricted funds
Total funds 686 1,252 581 - 2,519 8.887
3) VOLUNTARY INCOME
EXPRESSED IN EOOO MUSEUM OF LONDON GROUP
Greater London Authority City of London Corporation Heritage Lottery Fund Museums and Libraries Association Other grants Capital City donations Other donations Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
4) ACTIVITIES FOR GENERATING FUNDS
EXPRESSED IN £000 MUSEUM OF LONDON GROUP 2010 2009
Shops Private events and functions Photographic library Licensing Other income
Total
5) INVESTMENT INCOME
EXPRESSED IN £000 MUSEUMOFLONDONGROUP 201 0 2009 Interest on cash balances 24 249 Dividends received 71 70
Total
Some of the cash balances for the Museum of London and the Trust Funds are invested by the Chamberiain of the City of London Corporation at competitive rates that averaged 2.6% in 2010 (2009 4.8%).
6) INCOME FROM CHARITABLE ACTIVITIES
A) ARCHAEOLOGY TRADING SERVICES
EXPRESSED IN fOOO MUSEUM OFLONDON GROUP
2010 2009
Private developers English Heritage grants Other
Total
B) OTHER
EXPRESSED IN fOOO MUSEUMOFLONDONGROUP
2010 2009
Admission fees Other income from charitable activities
Total Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
7) RESOURCES EXPENDED
MUSEUM OF LONDON GROUP DIRECT OTHER SUPPORT TOTAL TOTAL STAFF DIRECT COSTS COSTS COSTS EXPRESSED IN COO0 2010 2009
Cost of Generating Funds Cost of generating voluntary 347 335 134 816 827 Income Fundraising trading 520 978 251 1,749 1,576 867 1,313 385 2,565 2,403
Charitable Activities Communications 446 616 168 1,230 1,195 Programmes and learning 1,162 2,246 335 3,743 3,809 Galleries and exhibitions 1,846 2,774 905 5,525 4,887 Collections 2,484 1,969 1,040 5,493 6,109 Archaeology trading services 4,966 1,629 172 6,767 9,132 10,904 9,234 2,620 22,758 25,132
Governance 30 60 8 98 133 Exceptional item 68 68 785 Total Resources Expended 11,801 10,675 3,013 25,489 28,453
Governance costs comprise audit fees, other professional accountancy costs, an apportionment of directors' remuneration and other costs and an apportionment of support costs.
Exceptional item
In June 2008, the Museum was the victim of a serious fraud. This was the subject of an active investigation by the City of London Police and by the Museum and a successful civil action for recovery of the missing funds in the High Court. The Museum is continuing to recover its losses and costs. During the year the Museum recovered f140k and incurred further legal costs (recoverable) of f208k.
8) ALLOCATION OF SUPPORT COSTS
Cost of Charitable Governance TOTAL TOTAL Generating Activities Costs Funds EXPRESSED IN EOOO 2010 2009
MUSEUM OF LONDON Finance and administration 148 947 3 1,098 1,825 Management costs 98 673 2 773 776 Human resources and IT 114 722 2 838 918 Pension liability - finance costs etc 25 278 1 304 703 GROUP TOTAL SUPPORT COSTS 385 2,620 8 3,013 4,222
Support costs are defined and allocated as disclosed in Note 1, Accounting Policies Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
9) EMPLOYEES
STAFF COSTS
MUSEUM OF LONDONGROUP EXPRESSED IN £000
Salaries and wages Social security costs Pension costs Employment agencies
Except for the item noted below, the Governors neither received nor waived any emoluments during the year (2009: £nil). Reimbursements to the Governors of the Museum of London were £nil (2009: Enii). No expenses were reimbursed to Trustees of the Museum in Docklands (2009: £nil).
During the year the Museum commissioned consultancy work on its Diversity Policy from one of the Governors, Mr Mark Palmer-Edgecumbe. The work, judged to have a commercial value of approximately £10,000, was charged to the Museum at £2,500. As the former Head of Global Diversity at Barclays Bank, Mr Palmer-Edgecumbe was judged by the Board to be in the best position to carry out this piece of work for the Museum. There were no amounts outstanding at the end of the year.
SENIOR EMPLOYEES
The following number of senior employees received remuneration within the ranges listed below:
MUSEUM OF LONDON GROUP
The remuneration of The Director, who was also the highest paid employee, was as follows:
Salary (Including performance related bonus) Contribution to pension scheme
BENEFITS IN KIND
No employee received any benefit in kind during the year Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
AVERAGE NUMBER OF EMPLOYEES
The average number of employees, anaiysed by the categories of resources expended, and after the apportionment of 44 support staff, was:
MUSEUM OFLONDON GROUP 2010 2009 Cost of Generating Funds Costs of generating voluntary income Fundraising trading
Charitable Activities Communications Programmes and learning Galleries and exhibitions Collections Archaeology trading services
Totals
10) NET MOVEMENT IN FUNDS is stated after charging:
EXPRESSED IN £000 MUSEUM OF LONDON GROUP 2010 2009
Depreciation 2,638 2,056 Auditor's remuneration: Audit fees - current year statutory audit 60 61 Audit fees - re audit of Whoie of Government Accounts 3 Audit fees - unprovided cost re 2007108 24 Other services 13
11) FIXED ASSETS
The historic artefacts and museum exhibits at the Museum of London are regarded as heritage assets. This is due to their historical importance and their being held for the purposes of preservation and public education. As explained in note l(f) only historic artefacts and exhibits purchased since 1 April 2001 have been included in the balance sheet due to the impracticality of economically valuing assets acquired before that date.
Museum exhibits at the Museum of London Dockiands are not regarded as heritage assets as they represent the environment in which other assets are displayed.
The Museum of London buildings at London Wail and Eagle Wharf Road are not heritage assets as their preservation is not an objective of the Museum. This contrasts with the Museum of London Docklands building, a former spice warehouse, which is historic, and the restoration and continued preservation of which is part of the Museum's objective.
As stated in Note l(f) fixed assets are stated at cost. Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
MUSEUM OF LONDON LEASEHOLD HISTORIC ASSETS UNDER OTHER TOTAL GROUP EXPRESSED IN PROPERTY ARTEFACTS 8 CONSTRUCTION ASSETS £000 MUSEUM EXHIBITS
Cost At 1 April 2009 34,687 14,695 12,120 3,552 65,054 Additions 332 - 7,839 979 9,150 Disposals - Completed works 4,121 - (5,990) 1,869 - At 31 March 2010 39,140 14,695 13,969 6,400 74,204
Depreciation At 1 April 2009 8,751 4,282 2,649 't5,682 Charge 986 744 908 2,638 Disposals - At 31 March 2010 9,737 5,026 - 3,557 18,320
Net book value At 1 April 2009 25.936 10,413 12,120 903 49,372 At 31 March 2010 29,403 9,669 13,969 2,843 55,884
MUSEUM OFLONDON LEASEHOLD HISTORIC ASSETS UNDER OTHER TOTAL EXPRESSED IN EOOO PROPERTY ARTEFACTS CONSTRUCTION ASSETS 8 MUSEUM
Cost At 1 April 2009 34,687 1,577 12,120 2,739 51,123 Additions 332 7,839 979 9,150 Transfers * 13,118 813 13,931 Disposals Completed works 4,121 (5,990) 1.869 At 31 March 2010 39,140 14,695 13,969 6,400 74,204
Depreciation At 1 April 2009 8,751 2,040 10,791 Charge 986 744 908 2,638 Transfers 4.282 609 4,891 Disposals At 31 March 2010 9,737 5,026 3,557 18,320
Net book value At 1 April 2009 25,936 1,577 12,120 699 40,332 At 31 March 2010 29,403 9.669 13,969 2,843 55,884
At 1 April 2009, all assets of the subsidiary company Museum in Docklands were transferred to the Museum of London, so that at 31 March 2010 no fixed assets were held by any subsidiary company and the closing positions for fixed assets were identical in the charity and the group. Museum of London Annual Report and Financial Statements Year Ended 3IstMarch 2010
Fixed assets divide into heritage assets and tangible assets
MUSEUM OF LONDON GROUP HERITAGE TANGIBLE TOTAL TOTAL EXPRESSED IN £000 ASSETS ASSETS 2010 2009
Leasehold property (Museum of London) 29,403 29,403 25,936 L'hold property (Museum of Ldn Docklands) 7,379 7,379 7,947 Other historic artefacts & museum exhibits 1,577 713 2,290 2,466 Assets under construction 13,969 13,969 12,120 Other assets 2,843 2,843 903
The net book value of leasehold property (including the Museum of London Docklands building which is classified as a Heritage Asset) represents the refurbishment and renovation costs less depreciation of the following properties:
MUSEUM OF LONDON GROUP 2010 2009 EXPRESSED IN £000
150 London Wall 18,432 14,825 Mortimer Wheeler House, Eagle Wharf Road 10,971 11,111 1 West India Quay 7,379 7,947
12) INVESTMENTS
MUSEUM OF LONDON GROUP EXPRESSED IN £000
Listed investments Market value at 1 April Unrealised gains/(losses) on Investments Market value at 31 March
Cost at 31 March 809 609 Cumulative unrealised gain at 31 March
The above is represented by holdings in Charishare and Charinco which are common investment funds managed by BlackRock Investment Management in accordance with a scheme maintained under the provisions of Section 22(1) of the Charities Act 1960. Charishare contains investments in equities and Charinco in its fixed interest equivalent. Asset allocation between the two funds is reviewed annually by the Governors and currently stands at approximately 8:92 Charinc0:Charishare. All investments are held in the U.K.
MUSEUM OF LONDON GROUP CHARINCO CHARISHARE TOTAL TOTAL EXPRESSED IN £000 2010 2009
London Museum Mackenzie Bell Joicey Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
13) DEBTORS DUE WITHIN ONE YEAR
EXPRESSED IN EOOO MUSEUM OF LONDON MUSEUM OF LONDON GROUP 201 0 2009 201 0 2009
Long term contracls 654 806 654 806
Trade debtors 1,175 1,942 1,077 1,848 Prepayments and accrued income 4,527 6,229 4,513 6,056 Sundry debtors 600 257 600 229 Due from group companies 432 1,516 6,302 8,428 6,622 9,649
inciuded within Trade debtors is a provision for bad and doubtful debts of £94k (2009: E103k). inciuded within accrued income is 21.7m (2009: £5.4m) of forward grant commitments from the Heritage Lottery Fund and £1.5m (2009: £nil) of accrued grants from the City of London for capital works.
14) CREDITORS DUE WITHIN ONE YEAR
EXPRESSED IN £000 MUSEUM OF LONDON MUSEUM OF LONDON GROUP
Trade creditors Accruals Debt repayable Sundry creditors Payments in advance Bank overdraft Due to group companies
15) PROVISIONS FOR LIABILITIES AND CHARGES
EXPRESSED IN £000 MUSEUM OF MUSEUM OF LONDON GROUP LONDON 2010 2009 2010 2009
At 1 Aprii Additions Unused amounts reversed Utilised At 31 March
The balance of f188k at 31 March 2010 was a provision for bonuses and some redundancy payments at the Museum of London Archaeology division.
40 Museum of London Annual Report and Financial Statements Year Ended 31" March 2010
'l6) TOTAL FUNDS
A) FUNDS ANALYSIS
MUSEUM OF LONDON GROUP BALANCE INCOME EXPENDI- TRANSFER OTHER BALANCE EXPRESSED IN EOOO AT 1 APRIL TURE BETWEEN GAINS 8 AT 31 2009 FUNDS LOSSES MARCH 2010
Permanent endowment funds London Museum Trust 408 162 570 Joicey Trust 491 179 670 Total Permanent Endowment 899 341 1,240
Restricted funds Museum of London Fixed Assets Fund Major Projects Fund Capital City Museum in Docklands Heritage Lottery Capitai fund Other restricted funds Designated fixed asset fund Other Dockiands funds Trust funds Joicey Trust Income Fund Mackenzie Bell Trust Totai Restricted
Unrestricted funds Designated funds Defined Benefit Pension Reserve (10,823) (304) - (12,980) (24,107) Fixed Assets Fund 24,594 - (1,917) 10.083 32,760 13,771 - (2,221) 10,083 (12,980) 8,653 General funds Museum of London 6,436 22,478 (20,483) (3,013) 5,418 London Museum Trust -
Totai Unrestricted 20,235 22,500 (22,743) 7,070 (12,980) 14,082
Total Funds 35,723 28,456 (25,489) - (12,388) 26,302 Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
BJ TRANSFERS BETWEEN FUNDS
Capital City and other funded capital projects f7,023k was transferred from the Capital City Fund to the Unrestricted Fixed Assets Fund to account for all expenditure on the project during the year 2009110. A further f1,870k of capital funding was transferred from the Major Projects Fund to the Unrestricted Fixed Assets Fund to account for expenditure on funded fixed asset additions during the year. These transfers have been made as the restrictions on income have now been fulfilled.
The deficit of fl.lm on the Capital City fund arises because at the balance sheet date expenditure on the Galleries of Modern London (completed in May 2010) was in excess of all sources of funding for the project. Fundraising efforts continue however and as such the Governors anticipate that sufficient funds will ultimately be received to ensure the deficit on the fund is eliminated.
Transfers within Unrestricted Funds The balances on the Museum of London Fixed Assets Funds are maintained so as to equal the net book value of total fixed assets less the outstanding amount of related long-term loans. To achieve this, f 777k was transferred to the Unrestricted Fixed Asset Fund from the General Fund.
Museum of London Docklands Included in the Group funds statement are a number of funds specific to the Museum of London Docklands. At 1 April 2009, this museum was amalgamated with the Museum of London. Consequently the balance of f412k in the Docklands designated fixed asset fund was transferred to the main Fixed Asset fund in Unrestricted Funds. The accumulated operating deficit of f2,235k of the Museum of London Docklands was amalgamated with the Museum of London Unrestricted General Fund. Museum of London Annual Report and Financial Statements Year Ended 3lS'March2010
ANALYSIS OF NETASSETS BETWEEN FUNDS
MUSEUM OF LONDON GROUP Tangible Invest- Current Current Long term Pension Total EXPRESSED IN £000 Fixed ments Assets Liabilities Liabilities Liabilities Net Assets and Assets Provisions
Permanent endowment funds London Museum Trust 553 17 570 Joicey Trust 612 58 670 Permanent endowment total - 1,165 75 - 1,240
Restricted Funds Museum Of London Fixed Assets Fund Major Projects Fund Capital City Museum in Docklands HLF: London, Sugar & Slavery Capital fund Other funds Trust Funds McKenzie Bell Joicey Trust Income Fund Restricted funds total
Unrestricted funds Designated funds Defined Benefit Pension - (24,107) (24,107) Reserve Fixed Assets Fund 46,681 (544) (13,377) - 32,760 Designated funds total 46,681 (544) (13,377) (24,107) 8,653
Generai Funds London Museum Trust 11 11 Museum of London - 10,282 (4.367) (497) - 5,418 General funds total - 10,293 (4,367) (497) - 5,429
Unrestricted funds total 46,681 - 10,293 (4,911) (13,874) (24,107) 14,082
Total Funds 55,884 2,066 14,078 (7,745) (13,874) (24,107) 26,302
17) TAXSTATUS
The activities of the Museum are undertaken for charitable purposes. Under Section 505 ICTA 1988 no liability to corporation tax has arisen for the period to 31 March 2010 (2009: £nil). Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
18) RELATED PARTIES
The following disclosures are made in recognition of the principles underlying Financial Reporting Standard 8 concerning related party transactions.
A) GREATER LONDON AUTHORITY (GLA)
In April 2008 the GLA took over from the Department for Culture, Media and Sport (DCMS) as one of the two main sponsors for the Museum (the City of London Corporation is the other - see below). The GLA is a related party as it has the right to appoint half of the Governing Body. The Group received grants from the GLA totalling f9,512k (2009: f9,367k) during the financial year ended 31 March 2010. Included in the 2010 figure above is f1.6m of capital funding, of which f655k was unspent at the year end (2009 : E408k)
B) CITY OF LONDON CORPORATION
The City of London Corporation is considered a related party since it has the right to appoint half of the Governing Body of the Museum.
The Group received grants from City of London Corporation totalling f5,669k (2009: f6,620k) during the financial year. In addition, grants of f1.5m to fund capital works have been accrued at 31 March 2010.
The City of London Corporation in accordance with the Museum of London Act 1965 is required from amongst the officers of the City of London Corporation to appoint persons who, whilst remaining officers of the City of London Corporation, act as Secretary and as Treasurer to the Board. Additionally, the Board has appointed other officers of the City of London Corporation to provide various services including legal, accounting, and internal audit services. The provision of all these services by the COL is the subject of a charge in accordance with the 1965 Act. During the financial year ended 31 March 2010 the charges for these services were f285k (2009: f297k).
Outstanding loans from COL to the Museum of London totalled f14,271k at 31 March 2010. This total inciudes a balance of E349K on a loan originally made to the Museum of London Docklands. Comparative balances at 31 March 2009 were f14,790k of which f349k related to Museum of London Docklands. Of these loans, f585k (2009: f524k) is due within one year. The Museum incurred interest charges related to these loans of f757k (2009: f866k).
C) GOVERNORS AND STAFF
With the exception of the transaction with one of the Governors disclosed under note 9, none of the Governors, key managerial staff or their related parties has undertaken any material transactions with the Museum or its subsidiary undertakings during the year. The Museum has received donations from a number of the Governors, in the normal course of charitable giving.
19) RETIREMENT BENEFITS
The Museum of London participates in the City of London Corporation Pension Fund, a defined benefit pension scheme. The amounts below relate to the Museum of London's share of the fund.
The valuation used for FRS 17 disclosures has been based on the results of the last full actuarial valuation carried out at 31 March 2007, as updated to 31 March 2010. The results of the latest full actuarial revaluation as at 31 March 2010 are currently awaited.
The contributions made by the employer over the financial year amounted to f1,232k, equivalent to 13.64% of pensionable salary (2009: £1,223k, 13.85%). However, this inciudes a supplementary employer's contribution - variable across Museum divisions - with a maximum of 1.54% (2009 : 1.77%) in respect of the capitalised cost of added years plus the cost of eariy retirement, in respect of eariy non ill health retirements, and these additional costs are fully recoverable over a five-year period. The adjusted rate will continue to be amended in light of any added years granted in respect of early non ill health retirements. For 20010-11 the employer contribution has been set at a maximum of 15.6%, including a maximum 1.56% supplementary contribution. 44 Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
ASSUMPTIONS The financial assumptions used to calculate scheme liabilities under FRS 17 are:
Valuation Method 2010 2009 2008 Yo % %
Price Increases 3.9% 3.0% 3.7% Salary increases 5.4% 4.5% 5.2% Pension Increases 3.9% 3.0% 3.7% Discount Rate 5.5% 6.7% 6.6%
The assumed life expectations from age 65 are:
Life expectations (years) Males Females Retiring today 20.84 23.86 Retiring in 20 years 21.79 24.80
NETASSETS OF THE SCHEME
The Museum of London's share of the net assets in the scheme and their expected long term rate of return were as follows:
NET ASSETS OF THE SCHEME LONG ASSETS LONG ASSETS LONG ASSETS TERM AT31 TERM AT31 TERM AT 31 RETURN MARCH RETURN MARCH RETURN MARCH AT 31 2010 AT31 2009 AT31 2008 MARCH MARCH MARCH 2010 2009 2006 % roo0 % coo0 % E'000
Equities Gilts Other Bonds Property Cash Total Assets (A)
Present Value of Scheme Liabilities (61,155) (36,648) (39,341) Present Value of Unfunded Liabilities (659) (718) (754) Total Vaiue of Liabilities (8) (61,814) (37,366) (40,095)
Net Pension Asset (A) - (B) Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
ANALYSIS OF PENSION SCHEME OUTGOING MUSEUM OF LONDON GROUP RESOURCES EXPRESSED IN £000 2010 2009 2008
Analysis of the amount charged to resources expended Service Cost 1,083 1,416 1,379 Curtailment and Settlements 19 118 208 Expected return on Employer Assets (2,048) (2,271) (2,391) Interest on Pension Scheme Liabilities 2,522 2,672 2,464
Net Resources Expended 1,576 1,935 1,660
Pension fund operational costs are apportioned to the expenditure heading on the Statement of Financial Activities according to staff costs in each category.
ANALYSIS OF AMOUNT RECOGNISED IN OTHER MUSEUM OF LONDON GROUP RECOGNISED GAINS AND LOSSES EXPRESSED IN £000 2010 2009 2008
Actual Return less expected return on pension scheme assets 8,372 (6,212) (3,554)
Experience gains 206 2,586
Changes in assumptions underlying the present value of the (21,558) 6,461 8,428 scheme liabilities Actuarial (iosses)/gains recognised in Statement of Total (12,980) 249 7,460 Recognised Gains and Losses
MOVEMENT IN (DEFICIT) DURING THE YEAR MUSEUM OF LONDON GROUP EXPRESSED IN £000 2010 2009 2008
(Deficit) at beginning of the year Restatement of opening balance by actuaries Current Service Cost Empioyer Contributions Unfunded Pension Payments Past service costs Other Finance income SettiementsICurtaiiments Actuarial (iosses)/gains (Deficit) at end of the year Museum of London Annual Report and Financial Statements Year Ended 31stMarch 2010
Reconciliation of opening and closing balances of the present value of the defined benefit obligation
MUSEUM OF LONDON GROUP (expressed in f 000s) 2010 2009
Opening defined benefit obligation Service cost Interest cost Actuarial losses/(gains) Lossesl(gains) on curtailment Estimated benefits paid net of transfers in Pasf service cost Contributions by Scheme participants Unfunded pension payments Closing defined benefit obligation
Reconciliation of opening and closing balances of the fair value of Scheme assets
MUSEUM OF LONDON GROUP (expressed in f 000s) 2010 2009
Opening fair value of Scheme assets Expected return on Scheme assets Actuarial gains/(losses) Contributions by employer including unfunded benefits 1,272 1,258 Contributions by Scheme participants 633 608 Estimated benefits paid including unfunded benefits (1,161) (1,225) Fair value of Scheme assets at end of period 37,707 26,543
History of experience gains and losses:
MUSEUM OF LONDON GROUP (expressed in f 000s) 2010 2009 2008
Differencebetween the expected and actual return on assets 8,372 (6,212) (3,555)
Percentage of Assets 22.2% (23.4%) (1 1.8%)
Experience gainsl(iosses) on liabilities 206 2,586
Percentage of the present value of liabilities 0.3% 6.0%
Actuarial (iosses)lgains recognised in other recognised gains (12,980) 249 7,460 and losses Percentage of the present value of liabilities 22.2% 0.7% 18.8% Museum of London Annual Report and Financial Statements Year Ended 31'' March 2010
Sensitivity Analysis:
The following table sets out the impact of a change in the discount rates on the Total Obligation and Projected Service Cost along with a +I- 1 year age rating adjustment to the mortality assumption.
Adjustment to discount rate +0.1% 0% -0.1% - Present value of total obligation - Projected service cost
Adjustment to mortality age rating assumption +I year None -1 year - Present value of total obligation 35,957 37,366 38.786 - Projected service cost 1,044 1,106 1,169
Projected Pension Expense for the year to 31 March 2011
f 000s
Service cost Interest cost Return on assets TOTAL
Employer contributions