The Friends of the V&A (A Company Limited by Guarantee)

Report & Financial Statements for the year ended 31 March 2010

CONTENTS

This annual review is available online and has beendesigned to be printed off in part or whole as per userrequirements. It has been designed to minimise ink usagewith the exception of the full page photographic images.

Reference and administrative information 01 - 03Trustees’ report 04 - 41Independent auditors’ report 42 - 47Statement of financial activities 48 - 48Balance sheet 49 - 49Notes to the financial statements 50 - 56

01

THE FRIENDS OF THE V&A REFERENCE AND ADMINISTRATIVEINFORMATION FOR THE YEAR ENDED 31 MARCH 2010

HRH Princess Alexandra, The Hon Lady Ogilvy, KG, GCVOMarina Vaizey ChairmanBernadette Barber John DeardsJohn Everett TreasurerJohn BensonVivek NandaPrudence SkeneSarah TytherleighTricia Bey (co-opted 13 January 2010) The Director of the Museum or his appointed nomineeThe Director of Public Affairs or his appointed nomineeThe Director of CollectionsThe Director of Development

The Committee Members are directors as defined by theCompanies Act. The Company is a company limited byguarantee whereby every Member’s liability is limited to £1.

Philippa Ouvry2720561267122Victoria and Albert Museum, South Kensington, London SW7 2RLhaysmacintyre, Fairfax House, 15 Fulwood Place, London WC1V 6AYCoutts & Co., St Martins Office, 440 Strand, London WC2R OQSCafCash Ltd., PO Box 289, West Malling, Kent ME19 4TA

President Committee Members

Ex Officio Members

Company SecretaryRegistered Charity Number

Registered Company NumberRegistered address

AuditorsBankers

02

The Chairman and Trustees of the Friends of the V&A would like to record theirthanks to all our Volunteers for all their very hard work this year. All our Volunteers

– on the Membership Desk, in the office, on committees, or leading our events –commit a huge amount of valuable time to the Friends of the V&A. We often need

new volunteers in all these areas, so if you might be interested in volunteering for us, please contact the Membership Office on 020 7942 2271.

MEMBERSHIP TEAMHead of Friends and Patrons

Philippa OuvrySenior Membership Manager

Karen Perry (to October 2009; part time) Mary Willis (from October 2009)

Membership Manager Mary Willis (to October 2009)

Eleanor Shakeshaft (from January 2010) Senior Membership Events Manager

Sonya Dunn Membership Events Managers

Joseph Watson (to March 2010) Rachel Crossley (from March 2010)

Membership Weekend Assistant Rebecca Thomas (part time)

Membership Officer Rachel Crossley (to October 2009)

Elizabeth Hipkins (from January 2010) Financial Accountant

Krissie Chambers (part time)

VOLUNTEERSEvents Committee Sarah Tytherleigh (Chairman),Bernadette Barber, Greta Chaffer,Joanna English, ElizabethHamilton, Annabel Hickox, EddaIrvine, Pauline Lawson-Smith,Alison Maurin, Susie Rose,Marina VaizeyEvents Advisory GroupKenneth Draper, Joanna English,Susannah Harrison, PaulineLawson-Smith, Alison MaurinEvent LeadersElizabeth Hamilton (Chairman toFebruary 2010); SusannahHarrison (Chairman fromFebruary 2010), Bernadette Barber,Susie Blundell, Greta Chaffer, JeanChippindale, Gwenda Constant,Kenneth Draper, Caroline Garvey,Karolina Joiner, Christine Kent,Rosemary Lowe, Naseem Malik-Noor, Jennie Moss, Liz Rogers,Susie Rose, Jacqueline Shimmings,Sarah Tytherleigh, JeanneWadvani, Christina Watts

VolunteersBernadette Barber (TrusteeRepresentative), Stefanie Agar,Penny Bardoni, Susan Bell, SueBicknell, Derek Bird, JennyBorthwick, Clare Bowring, DebbieBransgrove, Marie-Therese Bune,Nucia Butterworth, ToniCampbell, Clare Charles, BelClarke, Kelly Collins, GwendaConstant, Anne Cornwell, TerriDainty, John Deards, GilesDimock, Kenneth Draper, BarbaraDomanska, Sasiwimol Duque,Zoe Dwek-Adams, AlisonFarthing, Hui Feng, Nicky Fenn,Maria Fox, Ruth Gimlette, BrianGovett, Edna Green, LornaHanman, Susannah Harrison,Jean Heath, Dana Hepburn,Charlotte Holdsworth Hunt,Fay Horn, Annie Hunter,Dolores Keane, SusanKeenes, Christine Kent,Sarah Kent, NicoleKissun, Kelly Knapp,

Marianne Landau, WilliamLoschert, Beatriz Lutyens, FionaMacWatters, Naseem Malik-Noor,Margaret Malone, Jane Medcalf,Karen Morton, Elizabeth Nicholls,Julia Nicholson, Siew Ong,Elizabeth Oyler, Jayne Ralston,Barry Redhead, MargaretReynolds, Joanna Robins, BettySaunders, Jacqueline Saville,Jurgen Paul Schmitz, DinahShoults, Anjani Singh, ElizabethSingleton, Candida Slater, Ann MSmith, Margaret Stables, SandraSteel, Harry Stern, Helen Sumner,Eric Taylor, Jeanne Wadvani, KateWatson, Christina Watts, RodneyWelham, Patricia Williams

Photographer: Peter Kelleher

We were delighted this year to have a newMembership Desk, which you may have seen orvisited in the V&A’s Grand Entrance. The new deskwas designed by Jake Phipps, and has alreadyincreased Membership enquiries in the Museum.

The new Membership Desk, designed by Jake PhippsV&A Membership is run by the Friends of the V&A

Photographer: Peter Kelleher

04

THE FRIENDS OF THE V&ATRUSTEES’ REPORTFOR THE YEAR ENDED 31 MARCH 2010

The Trustees, who are also directorsof the charity for the purposes of theCompanies Act 2006, have pleasurein submitting their annual reportand the audited financial statementsfor the year ended 31 March 2010.

OBJECTIVES ANDACTIVITIESThe object of the Friendsof the V&A is toencourage, foster, assistand promote thecharitable work andactivities of the Victoriaand Albert Museum or ofany other art gallery ormuseum (which is notconducted for privateprofit and to which thepublic have access as ofright) selected by theCommittee of Association,for the benefit of thepublic at large.

The Members’ Room – noweasily accessible via the glasslift in the new Medieval &Renaissance Galleries. Go tolevel 4 and follow the signs

06

123

To support the V&A and its branchmuseums through grants of money

To increase loyalty and visits to the V&Aand its branch museums

To increase and spread knowledge of theV&A (and branch museums) and its work

T he Trustees have agreed threeprincipal aims and objectives:

07In supporting the V&A, the Friends of the V&Asupport its mission, and its own strategic objectives:

V&A MissionAs the world’s leading museum of art and design, the V&A enriches people’s lives by promoting the practice of design and increasing knowledge,understanding and enjoyment of the designed world.

V&A key strategic objectivesTo provide optimum access to collections and services for diverse audiences, now and in the future

To be acknowledged and respected as the world’s leading museum of art and design

To promote, support and develop the UK creative economy by inspiring designers and makers, and by stimulatingenjoyment and appreciation of design

To operate with financial and organisational efficiency

1234

The Trustees have had due regard to the Charity Commission guidanceon public benefit in developing an ongoing strategy to maximisesupport, loyalty and knowledge of the Victoria and Albert Museum and,in particular, they have considered how the charity's activities willcontribute to its charitable aims and objectives.

08

Our financial support for the V&A necessarily relies onthe support of our Members, and on as many Membersas possible joining and renewing. Despite the difficultfinancial climate, this year has been very successful.

At the end of financial year 2009/2010, Membershipnumbers had been climbing steadily since thebeginning of 2010 to reach 11,928 memberships,giving a total of 20,816 Members, and, at time ofwriting, are still increasing. The successful exhibitionprogramme – Maharaja, Decode, Quilts 1700-2010 andGrace Kelly: Style Icon – certainly contributed to thisincrease, as did the new galleries of Autumn 2009:Ceramics and Medieval & Renaissance.

09

ACHIEVEMENTS AND PERFORMANCE

10

The Friends of the V&A wereable to increase their supportthis year, giving

£192,519as grants in 2009/10

Support

£20,000 towards the Medieval & Renaissance Galleries

Exhibitionsand CapitalProjects

£20,000

£40,000

Acquisitions

Moon jar: white porcelain jarmade by Park Young Sook, Korea,2008. Purchase funded by theFriends of the V&A. Fully funded,with a grant of £40,000.Photo © Jae Hyun Kim

Album of drawings ofofficials of the Burmese courtat Mandalay, watercolour onpaper, Burma, 1853-1885.Purchased with the supportof The Art Fund and theFriends of the V&A. £6,000 given towards the total

£6,000

La Nature, biscuit porcelain,Sèvres, 1794. Purchasefunded by the Friends of theV&A. Fully funded, with agrant of £12,000

£12,000

Peep show or diorama showing the interior of an artist’sstudio, Martin Englebrecht, 18th century. Purchase funded by

the Friends of the V&A. Fully funded, with a grant of £2,500£2,500

Photograph, untitled (Temple Street) from Beneath the Rosesseries, Gregory Crewdson, digital pigment print, 2006.

Purchased with the support of the Friends of the V&A and theAmerican Friends of the V&A through the generosity of Mr

and Mrs Hughes Lepic. £9,200 in additional funding given bythe Friends of the V&A this financial year to complete the

funding required (Friends total £17,200)£9,200

Dress, floral printed silk chiffon,Madeleine Vionnet, France,1931. Purchase funded by theFriends of the V&A. Fullyfunded, with a grant of £23,652

£23,652

Two photographs by EdwardHartwig: top left, Broken Glass,gelatine silver print, 1980s; right,Vienna by Night, gum bichromateprint, 1933. Purchased with thesupport of the Friends of the V&A.£3,250 given towards the total

£3,250

Panel, probably from another Mazarin Chest, wood covered in black lacquer with gold and silver hiramaki-e and

takamaki-e lacquer, mother-of-pearl and details in silver,Japanese for the European market, c.1640. Purchased with the

support of the Friends of the V&A. Supported last year, andadditional funding of £8,097 given in financial year 2009/10 to

complete the funding required. Friends total £18,097£8,097

The Tiger-taming arhat, by anunknown court artist, Qingdynasty, late 1600s-1700s,hanging scroll, ink and colouron silk with details in gold.Purchased with the support ofthe Friends of the V&A. £20,000given towards the total

£20,000

Open landscape with Cottage, Figures and Animals, ThomasGainsborough, about 1786. Drawing in pen, ink and wash withtouches of black and white chalk on buff paper. A preparatory

sketch for a glass transparency, also held by the V&A. Acquiredwith the support of the Hugh Phillips Bequest, The Art Fundand the Friends of the V&A. £5,000 given towards the total£5,000

Bangle, Veiled Rays (Au Inclusion 2), David Watkins, 2007.Purchase funded by theFriends of the V&A. Pin, Encounter 10: NightGames (Wheel Pin Series2.10), 1998. Purchasefunded by the Friends ofthe V&A. Fully funded,with a grant of £15,000

£15,000

Fine Cell Work volunteersand curator Sue Prichardwith the HMP WandsworthQuilt, quilted patchworkhanging, made by theInmates of HMPWandsworth, London, 2010.Featured in Quilts 1700-2010. Purchase funded bythe Friends of the V&A.Final contribution of £4,214given this financial year,giving a total grant of£8,427 (full funding)

£4,214 Pieces acquired by the V&A are available for the benefit of the general public,either on open display or through the V&A’s archive facility at Blythe House.

Right: Colin Booth, Institute of Play:Bricks, Blocks and Architectural Toys.Installation at the V&A Museum ofChildhood 6 November 2010 – 27 March2011 as part of the Museum ofChildhood’s new ContemporaryProgramme. Purchased with the supportof the Friends of the V&A. £5,000towards the total. Photo © Keith Collie.

Also: Mood bags for under-5s: newlearning resources for the V&A Museumof Childhood. Purchased with thesupport of the Friends of the V&A.£5,000 towards the total.

Museum ofChildhood

£10,000

25

Scholarships and research

Other support

A travel bursary to Martin Flynn, Head of Access, Word and Image

Curatorial exchange between the V&A andthe Metropolitan Museum in New York

A student scholarship at the AttinghamSummer School (www.attinghamtrust.org)

The Friends of the V&A has also been able to designate £100,000from Reserves for supporting the major exhibition Quilts 1700-2010.We were delighted to be associated with this beautiful andthoughtful show, and hope that many of you enjoyed visiting.

Quilts 1700-2010 had a special resonance for the Friends of theV&A, as we had supported the acquisition of three of its exhibits: theAnn West Quilt, which so many of you donated towards; the HMPWandsworth Quilt, commissioned by the V&A and fully funded bythe Friends; and Natasha Kerr’s ‘At the End of the Day’, purchased byfunds from Contributing Members at the Collect fair in 2007. You willhave seen Natasha Kerr’s piece on all the marketing material for theexhibition. 141,651 people in total visited Quilts, with 40% of allMembers coming to see the exhibition.

We are also grateful to all those Members who supported theMedieval & Renaissance Galleries with a personal donation.

£850

£6,500

£3,110

Clockwise from aboveInlaid patchwork and appliqued coverlet or hanging, signedAnn West, England, dated 1820. Purchase funded bygenerous donations from V&A Members. Featured in theexhibition Quilts 1700-2010

At the End of the Day, transfer printed, silk screen printed,hand painted and hand stitched hanging, designed andmade by Natasha Kerr, London, 2007. Purchase funded bythe Contributing Members of the Friends of the V&A.Featured in the exhibition Quilts 1700-2010

The HMP Wandsworth Quilt, quilted patchwork hanging,made by the Inmates of HMP Wandsworth, London, 2010.Featured in Quilts 1700-2010

27

All V&A Members are encouraged to make the most of their Membershipby enjoying our extensive and varied programme of events, which isdesigned to complement the Museum’s collections and exhibitionprogramme. In addition, all new Members are invited to attend a freeWelcome Tour of the Museum, to help you learn more about the V&A.These tours often feature objects which have been supported by theFriends of the V&A, so they are a good opportunity to learn more abouthow your money helps the Museum.

Members’ Preview Days are another way to make the most of yourMembership, by seeing new exhibitions and galleries before the publicand without the crowds. Look out for the invitations in your V&AMagazine and the reminders in the monthly e-newsletter.

Contributing Members support a particular work, or a selection of works,of art each year, and they are invited to a special behind the scenes eventto view their acquisition with its curators. If you would like moreinformation about becoming a Contributing Member, please contact theMembership Office on 020 7942 2271.

This year has seen a significant increase in V&A Membership, enablingus to boost our support of the Museum. We aim to maintain thissuccess and to continue to maximise our support of the V&A.

The Trustees would like to express their thanks to all V&A Members fortheir loyalty to the Museum. We hope that you will continue to enjoyand make the most of your involvement with the world’s leadingmuseum of Art and Design.

Loyalty andknowledge

Looking tothe future

28

STRUCTURE, GOVE RNANCE ANDMANAGEMENT

29

The Friends of the V&A is acharitable company limited byguarantee, set up in 1976. It is

an independent charityestablished with its mainobject, as stated above, to

assist the Victoria and AlbertMuseum by providing

financial donations andthrough voluntary work. It is

governed by a Memorandumand Articles of Association

which were last amended atthe AGM in December 2007.

Applications for Trusteeship, thatis membership of the ExecutiveCommittee, are sought throughadvertisement in the V&AMagazine or through specialintroduction. Candidates aresought for their specific skillsand experience. Trustees serve asExecutive Committee membersfor a three-year period and maybe re-elected for a further three-year period. The Trustees meetquarterly, or as required,overseeing the objectives set outabove. In order to informTrustees of their responsibilities,Trustees are circulated with theCharity Commission booklet‘Responsibilities of Trustees CC3’and a Trustees’ Handbook

prepared by the MembershipOffice. In view of the size of thetrust and its resources, theTrustees are wary of devotingfunds to expensive trainingprogrammes, but keep the needfor trustee training under reviewand respond to any particularrequest that a Trustee may havein this regard. The Committee iscomposed of a minimum of fourmembers and four ex-officiomembers from the Museum:the Director of the V&A (orrepresentative), the Director ofPublic Affairs (or representative),the Director of Collections, andthe Director of Development,plus the Head of Friends andPatrons (Company Secretary).

30

Marina Vaizey was an art critic for over forty years. She has been a member of theArts Council, the Crafts Council and the Visual Arts Advisory Committee of theBritish Council, and a judge for the Turner Prize. Trusteeships past and presentinclude the Imperial War Museum, National Museums Liverpool, the South Bank,the Geffrye Museum, the National Army Museum and London Open House. Shewas awarded a CBE in the 2009 New Year Honours list. Marina is Chairman ofthe Friends of the V&A.

John Everett is a graduate in economics from University of London and anaccountant. As a management consultant at Deloitte, John worked in Europe, theUSA, Japan and Australia. He was appointed a partner in 1985, Managing Partnerof the UK consultancy in 1992 and was appointed to the UK and Global Boards ofDeloitte in 1994. John was senior partner from 1999 and retired from the firm in2005. He is a trustee of three charities and chairs two pension funds. John isTreasurer of the Friends of the V&A.

Bernadette Barber worked for many years in Human Resources for severalAdvertising Agencies and as a freelance Consultant specialising in GraduateRecruitment and Training. Most recently she has joined the Board of the Dioceseof Westminster Art and Architectural Affairs Committee. As a trustee of theFriends of the V&A, Bernadette has specific responsibility for the Volunteers andin September 2010 took over as chairman of the Events Committee.

Our current trustees areMarina Vaizey, Chairman

John Everett, Treasurer

Bernadette Barber

31

John Benson is a graduate of Art History from Edinburgh University and hasworked in business-to-business publishing for over 20 years. John has lived andworked in the United States, Asia and the UK and in 2000 he founded andbecame CEO of an internet publishing business which now operates in 18markets around the world. John is particularly interested in Indian art of the 17thand 18th centuries and post war British painting.

During the many years John Deards worked in advertising agencies hisresponsibilities included overseeing the creation of advertising in both Europeand the UK and the worldwide coordination of a global packaged-good business.Then in 2005 he completed his MA in the Material Culture of European Society.As a Trustee of the Friends of the V&A, John has specific responsibility for themarketing sub-group.

Dr Vivek Nanda is a partner at Alan Baxter & Associates. He leads various projectscovering strategic planning, urban design and urban heritage, and sustainability.Over the last decade as a practitioner, design champion and advisor, his projectexpertise has ranged from strategic level planning policy (addressing thegovernment’s housing growth agenda), major transport projects, urbanregeneration, masterplanning of urban extensions, also including, historic towncentres and the design of public spaces. He has authored good practice guidancein urban design and transport and pioneered new approaches towardsunderstanding city regions. As an international consultant he has advised severalagencies and practices in the US, Europe, Central Asia, the Balkans and India. Hehas taught and led major research projects at the University of Cambridge andUniversity College London. He is visiting faculty and lectures extensively atseveral key institutions in the UK, USA, Europe and South Asia.

John Benson

John Deards

Vivek Nanda

32

Prue Skene is Chairman of Rambert Dance Company and a Trustee of theStephen Spender Memorial Trust, the Nureyev Foundation and the Friends of theV&A. An experienced arts administrator, she was responsible for Rambert’sadministration (1975-1986), Executive Producer of the English ShakespeareCompany (1987-90 and 1992), Director of the Arts Foundation (1993-98), and hasworked as a freelance consultant for Arts Council England, the Clore LeadershipProgramme, the Rayne Foundation, and others. From 1992-2000 she was amember of the Arts Council of England and was Chairman of its Dance Panel(1992-96) and its Lottery Advisory Panel (1996-2000). Other Trusteeships haveincluded NESTA and the Arvon Foundation which she chaired from 2001-2005.She was awarded a CBE in the 2000 Birthday Honours List. As a Trustee of theFriends of the V&A, Prue has specific responsibility for the Governance andSuccession Planning sub-group.

Sarah Tytherleigh originally qualified as a lawyer but for a long time has beenorganising events for charity. Because of her considerable interest in history andthe arts (and Victorian art in particular) she has been a volunteer at the V&A forover twenty years, many of them as a member of the Friends Events Committee,which she chaired until September 2010.

In her early career Tricia worked in the pre-internet world of patent information,researching patenting activity and patenting trends for global clients. She laterspent 14 years with Deloitte Consulting building and leading different practiceareas including two years as the Managing Partner of the Dutch consultingpractice. She was later Managing Director of a London-based managementdevelopment school. She now lives in Scotland running her own cheese-makingbusiness. Tricia has an Engineering Science degree from Durham and an MBAfrom The London Business School.

Prue Skene

Sarah Tytherleigh

Tricia Bey (co-opted, standing for election at the 2010 AGM)

33

The Friends of the V&A’s systems of internal control are designed toprovide reasonable, but not absolute, assurance against materialmisstatement or loss. They include:

• A strategic plan and an annual budget prepared by the Trustees;

• Regular consideration by the Trustees of financial results, variance frombudget, non-financial performance indicators and benchmarking reviews;

• Delegation of authority and segregation of duties; and

• Identification and management of risks.

The Trustees have implemented a formal risk management process designedto assess risks and implement risk management strategies. The risk register isformally reviewed annually, with the risk register being considered by theTrustees periodically.

The day to day running of the organisation is delegated tothe Head of Friends and Patrons and her team, with strategicand financial decisions being considered and agreed by theCommittee. The Friends of the V&A is grateful for ongoingassistance from many V&A departments, notably Finance,Public Affairs and Development.

Risk management

34

FINANCIAL REVIEW

35

IncomeTotal income for the year amounted to £806,046(2009 £681,638) and consists mainly ofsubscriptions and income from events.

Resources expended amounted to £645,393(2009 £591,913), including £192,519 for grants tothe Museum and scholarships and £448,424supporting the members.

When appraising performance, the Committeeconsiders Membership numbers ('Members') whichit regards as the number of people in a position tovisit the V&A through Membership. This figuretherefore counts plus-guest memberships as two,family memberships as four, etc. The Committeealso reviews 'Memberships' by which is meant thenumber of individual subscriptions.

36

ReservesThe Trustees do not in general regard it as necessaryor desirable to hold substantial reserves but to makedonations to the V&A to assist it to purchase itemsor undertake projects as soon as requested.However, for reasons of prudence, the Trustees’opinion is that reserves should currently be held ataround 25% of income, with a minimum of£150,000. The reserves policy is reviewed on ayearly basis. Reserves are also increased temporarilyas necessary to meet known future fundingrequests from the Museum. Reserves at the end ofMarch 2010 stood at £443,164, of which£100,000 has been designated for supporting theQuilts exhibition, £100,000 for supporting a futureexhibition and £20,000 for late AlexanderMcQueen collection items.

37

Investment policyThe major part of the surplus funds is held ininterest-bearing bank accounts, as are amountswaiting distribution to the Museum onceapproved by the Committee. The aim is to obtainas high an interest rate as is possible withminimum risk. Accounts with relatively speedyaccess are used, as funds for purchases aresometimes required at short notice. The Trusteesconsider it appropriate to retain a portion of thereserves in units of the M&G Charifund, a unittrust designed for and widely used by charities.This policy is regularly reviewed. The value of theunits increased by 35% during the year.

38

PLANS FOR THE FUTURE

39

To continue in our aims and objectives by Working to increase and consolidate Membership numbers.

Continuing our extensive and involvingprogramme of events.

Ensuring that all Members enjoy a fulfillingrelationship with the V&A and the V&A Museum of Childhood.

Encouraging Members to continue and extendtheir support of the Museum, whether financial,as volunteers, or as ambassadors for the V&Aand the V&A Museum of Childhood.

40

TRUSTEES’RESPONSIBILITIES

41The Trustees are also responsible forkeeping proper accounting records thatdisclose with reasonable accuracy at anytime the financial position of the charitablecompany and enable them to ensure thatthe financial statements comply with theCompanies Act 2006. They are alsoresponsible for safeguarding the assets ofthe charitable company and hence fortaking reasonable steps for the preventionand detection of fraud and otherirregularities.

So far as each of the Trustees is aware atthe time the report is approved:• there is no relevant audit information of

which the company's auditors areunaware; and

• the Trustees have taken all steps that theyought to have taken to make themselvesaware of any relevant audit informationand to establish that the auditors areaware of that information.

On behalf of the TrusteesLady Vaizey of GreenwichChairman

The Trustees are responsible forpreparing their Trustees’ Report and thefinancial statements in accordance with

applicable law and regulations.

Company law requires the Trustees toprepare financial statements for each

financial year. Under that law theTrustees have elected to prepare the

financial statements in accordancewith United Kingdom Generally

Accepted Accounting Practice (UnitedKingdom Accounting Standards and

applicable law). The financialstatements are required by law to givea true and fair view of the state of theaffairs of the charitable company and

of the surplus or deficit of thecharitable company for that period. Inpreparing these financial statements

the Trustees are required to:

• Select suitableaccounting policiesand apply themconsistently

• Observe methods andprinciples in theCharities SORP

• Make judgements andestimates that arereasonable andprudent

• State whetherapplicable accountingstandards have beenfollowed, subject toany materialdepartures disclosedand explained in thefinancial statements

• Prepare the financialstatements on thegoing concern basisunless it isinappropriate toassume that thecharitable companywill continue inoperation

42

INDEPENDENTAUDITORS’ REPORTTO THE MEMBERSOF THE FRIENDS OFTHE V&A

43

We have audited the financialstatements of the Friends of

the V&A for the year ended 31March 2010 which comprise

the Statement of FinancialActivities, the Balance Sheet

and the related notes. Thefinancial statements have beenprepared under the accounting

policies set out therein.

This report is made solely to the charitablecompany's members, as a body, inaccordance with Section 495 of theCompanies Act 2006. Our audit work hasbeen undertaken so that we might state tothe charitable company’s members thosematters we are required to state to them inan auditor’s report and for no other purpose.To the fullest extent permitted by law, we donot accept or assume responsibility toanyone other than the charitable companyand the charitable company’s members as abody, for our audit work, for this report, or forthe opinions we have formed.

44Respective responsibilities oftrustees and auditorsThe responsibilities of thetrustees, who are also thedirectors of the charity for thepurposes of company law, forpreparing the Annual Reportand the financial statementsin accordance with applicablelaw and United KingdomAccounting Standards (UnitedKingdom Generally AcceptedAccounting Practice) and forbeing satisfied that thefinancial statements give atrue and fair view, are set out inthe Statement of Trustees'Responsibilities.

Our responsibility is to auditthe financial statements inaccordance with relevant legaland regulatory requirementsand International Standards onAuditing (UK and Ireland).

We report to you our opinionas to whether the financialstatements give a true and fairview, have been properlyprepared in accordance withUnited Kingdom GenerallyAccepted Accounting Practice,and have been prepared inaccordance with theCompanies Act 2006. We alsoreport to you whether in ouropinion the information givenin the Trustees' Report isconsistent with those financialstatements. In addition wereport to you if, in our opinion,the charitable company hasnot kept adequate accountingrecords, if the charitablecompany’s financialstatements are not inagreement with theaccounting records andreturns, if we have not received

45all the information andexplanations we require forour audit, or if certaindisclosures of trustees’remuneration specified by laware not made.

We read the Trustees' Reportand consider the implicationsfor our report if we becomeaware of any apparentmisstatements within it.

Basis of audit opinionWe conducted our audit inaccordance with InternationalStandards on Auditing (UKand Ireland) issued by theAuditing Practices Board. Anaudit includes examination,on a test basis, of evidencerelevant to the amounts anddisclosures in the financialstatements. It also includes

an assessment of thesignificant estimates andjudgements made by thetrustees in the preparation ofthe financial statements, andof whether the accountingpolicies are appropriate to thecharitable company'scircumstances, consistentlyapplied and adequatelydisclosed.

We planned and performedour audit so as to obtain allthe information andexplanations which weconsidered necessary in orderto provide us with sufficientevidence to give reasonableassurance that the financialstatements are free frommaterial misstatement,whether caused by fraud orother irregularity or error. In

46forming our opinion we alsoevaluated the overalladequacy of the presentationof Information in the financialstatements.

OpinionIn our opinion the financialstatements give a true and fairview of the state of thecharitable company’s affairs asat 31 March 2010 and of itsincoming resources andapplication of resources,including its income andexpenditure, for the year thenended; the financial statementshave been properly prepared inaccordance with UnitedKingdom Generally AcceptedAccounting Practice; thefinancial statements have been

prepared in accordance with theCompanies Act 2006; and theinformation given in theTrustees' Report is consistentwith the financial statements.

Richard WeaverSenior Statutory Auditorfor and on behalf ofhaysmacintyreStatutory AuditorsFairfax House15 Fulwood PlaceLondon WC1V 6AY

Museum of Childhoodlearning resources © V&A

48INCOME AND EXPENDITURE 2010 2009

Notes £ £Incoming resources Incoming resources from generated funds:Voluntary income - donations and legacies 20,080 5,968

Investment income 2 4,993 10,777

Incoming resources from charitable activitiesSupporting members 3 780,973 664,893

Total Incoming Resources 806,046 681,638

Resources expendedCosts of generating incomeCharitable activities:Supporting the V&A Museum 4 192,519 86,391

Supporting members 5 448,424 499,022

Governance costs 6 4,450 6,500

Total resources expended 645,393 591,913

Net incoming resources for the year 160,653 89,725

Other recognised gains and losses:Unrealised gain/( loss) on investments 20,640 (35,182)

Net incoming resources 181,293 54,543

Balance brought forward at 1 April 2009 261,871 207,328

Balance carried forward at 31 March 2010 443,164 £261,871

The notes on pages 50 to 56 form part of these accounts.All gains and losses arising in the year are included in the Statement of Financial Activities and arise from continuing operations.

THE FRIENDS OF THE V&A STATEMENT OF

FINANCIAL ACTIVITIES (including Income and Expenditure Account)

FOR THE YEAR ENDED 31 MARCH 2010

49

INCOME AND EXPENDITURE 2010 2009FIXED ASSETS Notes £ £ £ £Tangible assets 9 10,701 1,698

Investments 10 79,381 58,739

90,082 60,437

CURRENT ASSETSDebtors 11 38,302 153,505

Cash at bank and in hand 12 491,697 215,539

529,999 369,044

CREDITORS: amounts falling due within one year 13 (176,917) (167,610)

NET CURRENT ASSETS 353,082 201,434

TOTAL ASSETS LESS CURRENT LIABILITIES 443,164 261,871

FUNDSUnrestricted funds (Including revaluation reserve £30,173 2009: £9,531) 14 443,164 261,871

The financial statements were approved and authorised for issue by the Committee on 15th June 2010 and were signed below on its behalf by:

John EverettTrustee

The notes on pages 50 to 56 form part of these accounts.

THE FRIENDS OF THE V&A

BALANCE SHEET AT31 MARCH 2010

50THE FRIENDS OF THE V&ANOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2010

1. ACCOUNTING POLICIES

Basis of preparationThe financial statements have been prepared under the historical cost convention withthe exception of investments which are included at market value, and in accordance withthe Statement of Recommended Practice “Accounting and Reporting by Charities” (SORP2005), applicable accounting standards and the Companies Act 2006.

Incoming resourcesSubscriptions and donationsAll subscriptions and donations, including life subscriptions, are accounted for on areceipts basis.

Investment incomeDividends and interest are included in the accounts on a receipts basis.

Other incomeOther income is accounted for in the period in which it falls due. Income received inadvance for events is treated as deferred income and included in creditors.

Resources expendedResources expended are included in the Statement of Financial Activities (SOFA) on anaccruals basis, inclusive of any VAT which cannot be recovered. Costs are allocated directlyto functional headings wherever possible.

Cost of generating fundsCosts of generating funds are all costs involved in obtaining generated funds.

51Charitable activitiesCharitable activities are those costs relating to the core purposes of the charity.

Governance costsGovernance costs are those costs relating to the strategic direction of the charity and ofregulatory compliance.

Support costsSupport costs are those costs which are common to the range of charitable activities.These have been allocated on the basis of time spent by staff in each area.

Pension costsPension costs are paid under a defined contribution scheme. The assets of the schemeare invested and managed independently of the finances of the Organisation. Thepension costs charge represents contributions paid in the year.

Grants and ScholarshipsGrants and scholarships are accounted for at the time they are approved.

Fixed assetsIndividual fixed assets costing more than £250 are capitalised at cost. Depreciation isprovided at rates calculated to write off the cost of each asset over its expected usefullife. The estimated life used is 4 years for each asset.

InvestmentsInvestments are stated at market value at the balance sheet date. Net gains and lossesarising on revaluations and disposals are charged or credited to the SOFA.

StocksStocks of goods for resale are included at the lower of their cost or net realisable value.

FundsUnrestricted funds may be applied to any of the charitable objects at the discretion ofthe trustees. Designated funds are unrestricted funds which have been set aside by thetrustees for particular purposes.

522010 2009

£ £2. Investment IncomeInterest receivable 905 5,425

Dividends received 4,088 5,352

4,993 10,777

3. Income from Supporting MembersSubscriptions 690,594 575,293

Friends events 90,379 89,600

780,973 664,893

4. Supporting the Victoria and Albert Museum Grants to the Victoria and Albert Museum 174,492 63,850

(15 awards; 2009:8)Scholarships and grants to Museum staff 18,027 22,541

(3 awards; 2009:5)192,519 86,391

5. Supporting MembersDirect costsMember support 68,905 141,031

Magazine newsletter 80,550 78,600

Friends events 36,520 40,104

Support costsStaff costs (note 7) 205,021 211,202

Other costs (note 8) 57,428 28,085

448,424 499,022

53

2010 2009 £ £

6. Governance CostsAudit fee 5,450 5,500

Legal fees (2010: release of overaccrual) (1,000) 1,000

4,450 6,500

No commitee member was reimbursed for any expenses (2009: None) or received any remuneration from the charity.

7. Staff CostsStaff recharged by the Museum 205,021 189,776

Temporary staff - 21,426

205,021 211,202

The average number of employees during the year was 6 (2009: 6), all of whom were recharged from the Museum.No Member of staff received remuneration in excess of £60,000 (2009: £Nil)

8. Other Support CostsDepreciation 3,226 1,132

Bank and related charges 8,376 8,461

Printing, postage, stationery and telephone 21,366 16,558

Other costs 24,460 1,934

57,428 28,085

54

9. Fixed Assets Office Equipment

£CostAt 1 April 2009 71,708

Additions 12,229

At 31 March 2010 83,937

DepreciationAt 1 April 2009 70,010

Charge for the year 3,226

At 31 March 2010 73,236

Net Book ValueAt 31 March 2010 10,701

At 31 March 2009 1,698

All assets are used by the charity in pursuance of its charitable objectives.There were no capital commitments at 31 March 2010.

55

2010 2009£ £

10. InvestmentsQuoted investmentsMarket value at 1 April 2009 58,739 93,921

Unrealised investment gain/(loss) 20,642 (35,182)

Market value at 31 March 2010 79,381 58,739

Historical costs as at 31 March 2010 49,208 49,208

Total unrealised gains included in unrestricted funds 30,173 9,531

Investments consist of M&G Charifund Units.

11. DebtorsPrepayments and accrued income 4,632 21,709

Recoverable taxes 33,670 131,796

38,302 153,505

12. Cash and Bank BalancesInterest bearing accounts 491,017 170,193

Current account and cash 680 45,346

491,697 215,539

13. Creditors: amounts falling due within one yearTrade creditors 103,756 95,564

Accruals and advances received 73,160 72,046

176,917 167,610

56

14. Movement in Funds At At1 April 2009 Movement Transfers 31 March

2009 In Funds 2010£ £ £ £

Unrestricted fundsGeneral 161,871 181,293 (120,000) 223,164

Designated - Quilts Exhibition 100,000 - - 100,000

Designated - Major Exhibition(potentially postmodernism) - - 100,000 100,000

Designated - late Alexander McQueencollection items - - 20,000 20,000

261,871 181,293 - 443,164

15. COMMITMENTSNo commitments have been made in respect of future periods.

16. RELATED PARTYThe Friends of the V&A have a very close working relationship with the Victoria and Albert Museum. During theyear the Friends incurred liabilities to the Museum for salaries, management charges and other expensestotalling £245,446 and made sales of £35,478. In addition the Friends paid over £144,492 of grants to theMuseum. At 31 March 2010 a total of £75,326 was owed to the Museum.