Victoria and Albert Museum Annual Report and Accounts

MUSEUMS AND GALLERIES ACT 1992 Preseted pursuat to Museums ad Galleries Act 1992, c.44 sectio 9(8) Victoria ad Albert Museum Aual Report ad Accouts 2007-2008 ORDERED BY THE HOUSE OF COMMONS TO BE PRINTED 17 JULY 2008 LONDON: The Statioery Office 17 July 2008 HC 816 9.25

MUSEUMS AND GALLERIES ACT 1992 Preseted pursuat to Museums ad Galleries Act 1992, c.44 sectio 9(8) Victoria ad Albert Museum Aual Report ad Accouts 2007-2008 ORDERED BY THE HOUSE OF COMMONS TO BE PRINTED 17 JULY 2008 LONDON: The Statioery Office 17 July 2008 HC 816 9.25

Crow Copyright 2008 The text i this documet (excludig the Royal Arms ad other departmetal or agecy logos) may be reproduced free of charge i ay format or medium providig it is reproduced accurately ad ot used i a misleadig cotext. The material must be ackowledged as Crow copyright ad the title of the documet specified. Where we have idetified ay third party copyright material you will eed to obtai permissio from the copyright holders cocered. For ay other use of this material please write to Office of Public Sector Iformatio, Iformatio Policy Team, Kew, Richmod, Surrey TW9 4DU or e-mail: licesig@opsi.gov.uk ISBN: 978 0 10 295705 1

Cotets Page Aual Report 2 Fiacial Review 17 Remueratio Report 20 Statemet o Iteral Cotrol 23 Aexes A: V&A Maagemet staff ad structure 26 B: Orgaisatioal structure 28 C: Legal ad admiistrative iformatio 29 Statemet of Trustees ad Director s resposibilities 30 The Certificate ad Report of the Comptroller ad Auditor Geeral 31 Fiacial Statemets: Cosolidated Statemet of Fiacial Activities 33 Cosolidated ad Museum Balace Sheet 35 Cosolidated Cashflow Statemet 36 Notes to the Cosolidated Fiacial Statemets 37 1

Aual Report 1. Itroductio The V&A is Britai s atioal museum of art ad desig. Its origis lie i the Govermet School of Desig fouded i 1836 ad it opeed as Museum of Maufactures (at Marlborough House) i 1852. It was reamed the Museum of Orametal Art i 1853 ad became the South Kesigto Museum i 1857. Quee Victoria coferred the ame Victoria ad Albert Museum i 1899. The V&A was part of the Govermet s Departmet of Educatio ad Sciece ad operated uder the auspices of a Advisory Coucil util 1 April 1984 whe it acquired Trustee status with the passig of the Natioal Heritage Act 1983. The V&A is curretly sposored by the DCMS. The Museum s Board of Trustees is aswerable to the Secretary of State for Culture, Media & Sport for the policies ad performace of the Museum. The Miister is, i tur, aswerable to Parliamet. The Director of the V&A is accoutable both to the Board as Chief Executive ad to the Secretary of State as Accoutig Officer. The Victoria ad Albert Museum (V&A) comprises the mai site at South Kesigto, the V&A Museum of Childhood (MoC) at Bethal Gree ad the archive/study collectios site at Blythe House, West Lodo. There are collectios stores i Battersea, Lodo, ad Dea Hill Park, Wiltshire. This aual report covers all of the charitable activities udertake by the V&A i 2007/08, orgaised uder three headigs: Collectios & Visitors, Exhibitios & Cotemporary ad Educatio, Learig & Iterpretatio. It also refers to the Museum s key strategic objectives. Further iformatio ca be foud i other corporate documets, otably, the V&A Aual Review 2007/08 ad the 2007/08 aual report agaist the DCMS/V&A Fudig Agreemet. These ca be foud at the V&A website:www.vam.ac.uk. V&A Missio As the world s leadig museum of art ad desig, the V&A eriches people s lives by promotig the practice of desig ad icreasig kowledge, uderstadig ad ejoymet of the desiged world. V&A key strategic objectives To provide optimum access to collectios ad services for diverse audieces, ow ad i the future To be ackowledged ad respected as the world s leadig museum of art ad desig To promote, support ad develop the UK creative ecoomy by ispirig desigers ad makers, ad by stimulatig ejoymet ad appreciatio of desig To operate with fiacial ad orgaisatioal efficiecy 2007/08 Fiacial Summary 000 Total Icome from cotiuig operatios 87,654 Total Operatig expediture (62,619) Total Fuds 420,115 Icrease i cash ad cash equivalets 3,123 Structure, Goverace & Maagemet The V&A is govered by the Natioal Heritage Act 1983 (NHA). The NHA was modified ad repealed to some extet by the Museums ad Galleries Act 1992, but this did ot materially affect the status of the Museum. The V&A is a o-departmetal public body sposored by the Departmet for Culture, Media ad Sport, ad is a charity exempt from registratio uder the Charities Act of 1993. Its ivestmets are govered by the Trustee Act 2000. Appoitmets to the V&A Board of Trustees, icludig that of the Chairma, are made by the Prime Miister followig the DCMS process for recruitig upper tier public appoitmets. Appoitmet to the Board is govered by selectio o merit, o the basis of equality of opportuity for all, ad is subject to moitorig by the Commissioer for Public Appoitmets. There is oe ex officio member of the Board, the Rector of the Royal College of Art; curretly Professor Sir Christopher Fraylig. 2

The V&A Board is a body corporate with betwee 12 ad 20 members. At 31 March 2008 there were 12 Trustees; however the term of oe of them expired o that date ad the umber of Trustees dropped to 11: the recruitmet process was iitiated with DCMS i 2007/08. Trustees serve a iitial term of up to four years ad are, i practice, restricted to servig for a total of o more tha 10 years. Trustees are ot remuerated but are able to claim expeses. The V&A Board of Trustees has the followig geeral fuctios uder the NHA: So far as practicable ad subject to the provisios of this Act, the Board shall (a) care for, preserve ad add to the objects i their collectios, (b) secure that the objects are exhibited to the public, (c) secure that the objects are available to persos seekig to ispect them i coectio with study or research, ad (d) geerally promote the public s ejoymet ad uderstadig of art, craft ad desig both by meas of the Board s collectios ad by such other meas as they cosider appropriate. The Comptroller ad Auditor Geeral is the auditor of the Museum s cosolidated accouts. The audit fee for this work was 36,800. As far as the Accoutig Officer ad the Board of Trustees are aware there is o relevat audit iformatio of which the etity s auditors are uaware. The Accoutig Officer ad the Board of Trustees have take all the steps that they ought to have take to make themselves aware of ay relevat audit iformatio ad to establish that the etity s auditors are aware of that iformatio. The V&A has a close relatioship with the Frieds of the V&A (charity o. 272056), but does ot have ay cotrol over its Board. The V&A co-operates with a wide rage of charities ad orgaisatios i furtherace of its aims ad objectives. Some of these are referred to i this aual report, but there are too may to list idividually. 2. Collectios & Visitors V&A Strategic Objective A: Provide optimum access to collectios ad services for diverse users The V&A wo Large Visitor Attractio of the Year 2007 at the Ejoy Eglad Awards for Excellece, the highest accolade i Eglish tourism, ru by Visit Britai (joit wiers with the Imperial War Museum Duxford). This followed the Museum s receipt of Visit Lodo Best Visitor Attractio of the Year Award 2007, i which the judges said the followig: Jue 2007 saw the V&A celebrate its 150th aiversary, ad what better way to do it tha with some truly excellet ad iovative iitiatives that helped draw record-breakig umbers of visitors. Evets such as the icredibly popular Kylie exhibitio, the ew Jameel Gallery ad associated evets, ad the Black Heritage evets programme, attracted visitors from a wide rage of cultural, social ad ethic backgrouds, may of whom were first time visitors to the Museum. Visitor umbers ad profile ad feedback There were 3.76 millio visits to V&A collectios i 2007/08, comprisig 2.62 millio visits at our Lodo sites ad 1.14 visits to V&A tourig exhibitios at other veues i the UK ad aroud the world. This is the first time that tourig exhibitios have attracted over a millio visits ad reflects the growig importace the Museum attaches to sharig our collectios throughout the world (see below). Visits to South Kesigto, at 2,280,800, were lower tha i 2006/07 by 11%. The umbers attedig special temporary exhibitios were comparable i both years, but there were fewer high-profile gallery-opeigs i 2007/08. The declie is also attributed to lower tourist umbers i Lodo geerally, especially from North America. At the V&A Museum of Childhood (MoC), the steep rise i visit figures that accompaied its re-opeig i December 2006 after a year-log developmet project was sustaied. The total of 332,800 visits was the highest ever ad represeted a rise of 41% compared to the previous full year of opeig: 235,400 i 2004/05. The MoC has had a strog public programme ad doubled capacity for formal educatio. The V&A has a comprehesive strategy for Access, Iclusio & Diversity (AID) ad cotiued to work to the AID Actio Pla 2005-2008. Some aspects of the work ad outcomes focused o visitors ad collectios are briefly outlied here. 3

The Museum cotiued its high-profile, HLF-fuded project to promote ad embed cultural diversity, Capacity Buildig ad Cultural Owership, which combied activities focused o collectios, workforce ad egagemet. This is part of the over-archig Access, Iclusio & Diversity Strategy. The outputs themselves have bee very diverse ad icluded i 2007/08: the exhibitio Ucomfortable Truths: the shadow of slave tradig o cotemporary art ad desig; gallery trails; workshops i heritage-related skills; recordigs of performaces; display of Asate gold weights to commemorate 50 years of Ghaaia idepedece; etworkig evets; Flickr groups; itercultural festivals ad may more. Eve though overall visit umbers fell slightly i 2007/08 compared to 2006/07, the umber of visits by people from a UK Black, Asia ad miority ethic (BAME) backgroud rose by 3.8% (223,600 i 2006/07; 232,100 i 2007/08). As a proportio of the total UK visits, BAME visits rose from 12% i 2006/07 to 14% i 2007/08. This is partly attributable to the MoC beig ope for the full year: BAME visits accout for 28% of the total UK audiece at MoC. The V&A aims to have a workforce that reflects the cultural diversity profile of either the whole UK or that of Lodo ad the South East, depedig o the desigated recruitmet catchmet area for differet jobs. The atioal ad regioal profiles were 8% BAME ad 16% BAME respectively (2001 cesus), ad i 2007/08 V&A BAME staffig was 11% for atioally-recruited posts ad 21% for regioally-recruited posts, both havig rise compared to 2006/07. The Kylie exhibitio proved extremely successful i attractig UK visitors from lower socio-ecoomic groups: 21% from NS-SEC categories 5-8 as opposed to 13% for visitors to the whole Museum. A rage of targeted social iclusio programmes ofte ivolved workig i partership, for example with prisos, commuity groups ad charities, local authorities ad other public bodies. Visits by people from lower socio-ecoomic groups (NS-SEC 5-8) showed a similar patter to that of UK BAME visits, agai boosted by the cotributio of MoC, where 37% of visits were from these groups. At all sites, their proportio of all UK visits rose from 12% i 2006/07 to 16% i 2007/08. Numbers of lower socio-ecoomic group visits rose by 19.7% (224,900 i 2006/07; 269,100 i 2007/08). The V&A cotiued ad expaded its programmes ad activities for disabled people, with particular emphasis o people with learig disabilities ad metal health services users. The V&A has, for some time, collected data o visits to South Kesigto by disabled people ad from 2008/09 this will be a formal performace idicator. I 2007/08 4% of visitors idetified themselves as havig a disability or log-term health problems. The V&A marked UK Lesbia Gay Bi-sexual ad Trasgeder History Moth for the first time i February 2008 with three itroductory talks ad gallery tours. FuturePla This is the V&A s large-scale, log-term capital re-developmet programme. Its aim is to ope up the Museum ad its collectios, both physically ad itellectually, for everyoe to use ad ejoy. The galleries ad public spaces of the historic buildigs themselves are trasformed through beautiful ad sesitive desig ad the collectios are preseted i egagig ad stimulatig ways that draw o the latest research ito objects, museum practice ad historic iteriors. By the ed of 2008, more tha 66% of public space at V&A South Kesigto will have bee upgraded. As well as access to collectios through display ad iterpretatio, FuturePla cotributes to may other Museum agedas such as egagemet with the creative idustries, icreasig audiece diversity ad iclusio ad improvig carbo-efficiecy. FuturePla is primarily fuded from sources other tha core Grat i Aid (GIA). The mai FuturePla project completed i 2007/08 was the Porter Gallery, to house the Museum s Cotemporary exhibitio programme. I additio, a suite of galleries was adapted to make a showcase for theatre ad performace followig closure of the V&A Theatre Museum site i Covet Garde i 2007. These galleries opeed i November 2007 with the exhibitio, Collaborators: UK Desig for Performace 2003 2007 ad will subsequetly house displays from the V&A Theatre Collectio. Opeig of the Dorothy ad Michael Hitze Gallery i July 2007 completed the ru of Sculpture galleries o the groud floor. Work progressed o a umber of other FuturePla projects, most otably: Jewellery Gallery (May 2008); Medieval & Reaissace Galleries (Nov 2009); two phases of the Ceramics Galleries (Sep 2009 ad Apr 2010); Buddhist Sculpture i Asia (sprig 2009) ad the Sackler Cetre for arts educatio at the V&A (Jul 2008). The followig projects were iitiated i 2007/08: The Arts of Thailad; 20th Cetury galleries; the Rosalide ad Arthur Gilbert Galleries. 2009 sees the ed of the curret phase of FuturePla ad the Museum bega to pla for the subsequet phase (2010-2019), icludig a ew buildig o Exhibitio Road. 4

Olie Museum ad electroic access: http://www.vam.ac.uk The iteret is a importat route to accessig the V&A collectios, as demostrated by the 24 millio visits made i 2007/08 by users i 169 coutries. Other laguages are added regularly ad there is ow iformatio i ie laguages, icludig a special Chiese laguage site. 33% of the collectios are accessible olie. A good deal of this is accouted for by catalogue-style records, but there are 29,000 records i Search the Collectios (3.7% of the collectios). I additio, the V&A websites provide extesive rich cotet with a focus o iteractivity for all types of user, from specialist academic resources to games for youg childre. Every major exhibitio has a associated website, there are specialist microsites, ad the Museum is systematically uploadig its learig resources. The V&A leads a cosortium of ie atioal orgaisatios i a project to icrease use of their websites by schools (fuded by the Treasury Ivest To Save Budget), ad also iitiated a feasibility study o a itegrated approach to makig collectios accessible via the web (with the Natioal Museum of Sciece & Idustry ad the Natioal Maritime Museum). Throughout 2007/08, the V&A operated its pioeerig iitiative to allow free use of images by o-commercial users. The Museum also established a Digital FuturePla Group, chaired by the Director, to produce a comprehesive strategy ad actio pla for digital ad media. Oe of the priorities here is a step chage i the rate of digitisatio of the collectios. The V&A was a Official Hoouree of The 11th Aual Webby Awards, 2007. The Gilbert Collectio I March 2008 the V&A etered ito a agreemet with the Heather Trust for the Arts (custodias of The Rosalide ad Arthur Gilbert Collectio, a collectio of silver, gold, micromosaics ad gold boxes) to display this substatial collectio at the V&A. The agreemet has bee siged by all stakeholders: the Natioal Heritage Memorial Fud, The Gilbert Public Arts Foudatio, the Gilbert Collectio Trust, the Victoria ad Albert Museum ad the Heather Trust for the Arts. Uder the agreemet the Gilbert Collectio (retured by the Gilbert Collectio Trust) has bee placed by the Heather Trust o loa with the V&A. The V&A Trustees have udertake to provide both a promiet suite of galleries to be amed The Rosalide ad Arthur Gilbert Galleries ad a high level of curatorial care. V&A Strategic Objective B: Be the world s leadig museum of art & desig Acquisitios The V&A s status as the world s pre-emiet museum of art ad desig is fouded upo its collectios. As the vital heart of the Museum, it is essetial to cotiually develop our collectios to make the best of historic ad cotemporary desig available to the public ad to reflect chagig societies. This is icreasigly difficult to sustai uder the pressures of reduced GIA, risig prices i the art market ad competitio from other buyers (both private ad istitutioal), ofte from overseas. Nevertheless, the modest sums that the V&A is able to allocate to acquisitio from core budgets is supplemeted by fuds levered i from elsewhere, such as doors, the Frieds of the V&A ad grat-makig bodies. I 2007/08 the total cost of purchased objects was 760,000, of which 42% came from Museum fuds. I all the V&A acquired 13,526 objects for the collectios, of which 12,296 were doated. Collectig is partly drive by the temporary exhibitios programme ad objects were acquired for forthcomig shows, A Cetury of Olympic Posters, Blood o Paper: The Art of the Book, Cold War Moder ad Quilts. Acquisitio Highlights i 2007/08: Scadal : a broze relief siged ad dated by the artist, Charles Sargeat Jagger (1885-1934). The relief, dated 1930 is the compaio piece to the Melchett fire basket, also by Jagger, ad acquired by the V&A i 2005. Both the relief ad the fire basket were commissioed as a part of a decorative remodellig for Mulberry House, Smith Square, Westmister. The pieces are of outstadig aesthetic sigificace ad are ow reuited i the V&A s collectios. A pair of vases by E. W. Godwi (1833-1886). The vases are the oly kow examples of Godwi s desigs for ceramics (other tha tiles) ad are cosequetly importat pieces. They will be key exhibits i a major show devoted to Aestheticism at the V&A i 2010/11. At Collect 2008, the Museum acquired 13 pieces of cotemporary art ad desig for the followig collectios: Asia; Textiles ad Fashio; Metalwork, Ceramics & Glass. A rare Ottoma miiature from the 19th cetury depictig a high-rakig member of the Ottoma bureaucracy to be displayed i the Jameel Gallery of Islamic Art. 5

Speaker Bromley silver from the estate of Sir Walter Bromley Daveport: acceptace i lieu items allocated to the V&A i March 2008. These items have bee o loa to the V&A sice 1969 ad are displayed i the Silver Galleries. The silver was origially owed by William Bromley (1663-1732) i his capacity as Speaker of the House of Commos from 1710-1713. To celebrate the V&A s 150th aiversary of its opeig i South Kesigto the V&A asked leadig desigers, architects, photographers, fashio desigers ad artists to cotribute a page to a aiversary album. This resulted i 212 cotributio by artists ad desigers such as Maolo Blahik, Lord Rogers, Julia Opie, Bejami Zephaiah, Tracy Emi ad Viviee Westwood. Research The V&A Research Departmet is highly active ad at the forefrot of its field. Research, focused o the collectios, uderpis the Museum s public facig outputs i the form of exhibitios ad displays, gallery developmets, books ad publicatios. The output of publicatios totalled 49 i 2007/08. As well as extesive research by the Museum s ow staff, the Departmet has widespread liks with other orgaisatios i the UK ad overseas through secodmets, exchages ad Fellowships; i 2007/08 there were 22 such placemets (19 iward: 3 outward). Collaborative studetship iclude 59 MA, MPhil ad PhD studets o collaborative postgraduate programmes ru joitly with the Royal College of Art, ad 12 AHRC-fuded doctoral studetships with other HE orgaisatios. Much vital research work is exterally fuded ad seve major grat applicatios were successful i 2007/08. Iteratioal Strategy The V&A Iteratioal Strategy was agreed i March 2006 ad is predicated o a series of programmatic alliaces with overseas orgaisatios i key locatios. Memorada of Uderstadig are i place with the Fie Arts Museums of Sa Fracisco, the Natioal Museum of Chia ad the Dr Bhau Daji Lad Museum, Mumbai. These are formal expressios of commitmet to collaborate o exhibitios, research ad staff developmet ad other areas of mutual iterest. I 2007/8 the V&A added the Salar JugMuseum i Hyderabad to its iteratioal collaborators ad a programme of staff placemets will start i 2008. Uder a formal exchage agreemet with the Kremli Museum, the V&A will show a exhibitio called The Magificece of the Tsars i 2008/09, while the Kremli Museum will host Two Ceturies of British Fashio from the V&A. The V&A has also udertake fruitful collaboratios with The Bard Graduate Ceter for Studies i the Decorative Arts, Desig ad Culture, New York. The Bard Ceter orgaised the exhibitio, Thomas Hope: Regecy Desiger, which opeed at the V&A i March 2008. Iteratioal co-operatio ca also be effected through digital iitiatives: the V&A is a parter i Museums With No Frotiers. I partership with six other cultural orgaisatios, the V&A has worked with DCMS to secure a higher profile for cultural diplomacy. This resulted i a ew fudig stream aouced i the Comprehesive Spedig Review 2007, the World Collectios Fud, which we hope to access to support tourig exhibitios. Iteratioal loas ad tourig exhibitios are covered below, but it is oted here that the exhibitio, A Cetury of Olympic Posters, was the first exhibitio from a UK atioal museum to be show at a provicial museum i Chia. It opeed at the Liaoig Museum, Sheyag i March 2007 followig a ru at the Capital Museum i Beijig, where it was visited by Sarah Brow whe she accompaied the Prime Miister o a official visit to Chia. Loas ad Iteratioal tourig exhibitios are covered below. 6 V&A UK Strategy Five regioal museum services (Tye & Wear Museums, Machester City Galleries, Sheffield Galleries & Museums Trust, Birmigham Museums & Art Gallery ad Brighto & Hove Galleries & Museums) comprise the V&A UK Partership that collaborates to icrease atiowide access to, ad public beefit from, collectios ad museum services. Co-operatio is o may levels, icludig exhibitios, learig ad commuity programmes, loas, research, staff developmet, marketig ad advocacy. At its core, though, is Image & Idetity, the DCSF/DCMSfuded programme of creative, artist-led activities for school pupils ad vulerable youg people. NCH (the childre s charity) is also a key parter ad the programme has ivolved thousads of participats ad visitors sice it bega i 2003. Of the V&A UK Parters, the logest ad deepest relatioship has bee with Sheffield Galleries & Museums Trust sice 1999. The V&A exhibitio, Where Are We? Questios of Ladscape, was show at the Graves Art Gallery, Sheffield, September 2007 to Jauary 2008, ad preparatios cotiued for a further five V&A shows i 2008 ad 2009. These iclude the culmiatio of two major iteratioal tours, Viviee Westwood; A Retrospective ad Medieval & Reaissace Treasures from the V&A. The V&A regularly receives approaches from local authorities ad other bodies about partership ad collaboratio projects. I 2007/08 two such projects were live ; oe for a atioal museum of performace i Blackpool, ad oe for a ew creative desig veue i Dudee.

As well as parterships with specific regios, the V&A has espoused Subject Specialist Networks (SSNs) collaboratios based o collectios. With fudig from the Museums, Libraries & Archives Coucil (MLA), the V&A has led two SSN projects, oe o the documetatio of performace ad oe o care of textiles ad dress. The Museum leads or participates i a umber of other SSNs. A key elemet of the V&A UK Strategy is the Purchase Grat Fud (PGF), ru by the V&A sice 1881. 1m is provided via MLA for grats to o-atioal museums, galleries ad specialist repositories i Eglad ad Wales to eable the acquisitio of objects for their collectios. Advice o collectig ad professioal stadards is ofte as valuable to regioal museums as the grats themselves. I 2007/08 PGF received 264 grat applicatios from 135 orgaisatios: 166 (63%) of these, from 100 orgaisatios, were successful. Artefacts with a total value of 3.5m were purchased, ragig from a Neolithic axe i Dorchester to a video artwork for the Fers Art gallery i Hull. Loas ad V&A UK tourig exhibitios are covered below. Loas The V&A leds about 3,000 objects every year to eable its collectios to be see more widely ad i ew cotexts. Short-term loas are usually for temporary exhibitios orgaised by aother istitutio. Log-term loas, of which most are withi the UK, are usually made whe a object has particular sigificace to a veue or locality. The figures are give below; these do ot iclude the 2,000 objects, or veues, for V&A tourig exhibitios. UK Overseas Total Number of objects Short-term 577 595 1,172 Log-term 1,788 64 1,852 Total 2,365 659 3,024 Number of veues 239 117 356 V&A Tourig Exhibitios The V&A cotiued to expad its programme of tourig exhibitios as a meas of sharig its collectios ad expertise, of raisig reveue, ad of promotig the Museum, Lodo ad the UK. The V&A Theatre Collectios bega a ew programme that icludes displays suitable for o-traditioal veues such as theatres, cocert halls, commuity cetres. Iteratioally, the tourig exhibitio programme has broke ew groud, opeig the first V&A exhibitio i Korea i March, ad securig ew veues i the Middle East for future shows. The statistics* are record-breakig, reachig well over oe millio visits i 2007/08. UK Overseas Total Visits (reported to date) 213,300 924,500 1,137,800 Exhibitios 9 11 20 Veues 14 22 36 Objects 458 1,548 2,006 *The figures give above iclude three exhibitios comprisig reproductios of historic photographs or graphic displays with o origial museum objects. UK: 1 show; 1 veues; 30,000 visits. Overseas: 2 shows; 3 veues; 41,000 visits. V&A Strategic Objective C: Promote, support ad develop the UK creative ecoomy The exhibitio, Out of the Ordiary: Spectacular Craft, was created i collaboratio with our parters, the Crafts Coucil. The year eded with the opeig of Chia Desig Now. These exhibitios, alog with cotemporary art istallatios by Simo Perito, the Campaa Brothers, Boudicca ad Zaha Hadid ad other displays, evets ad publicatios, brought some of the best cotemporary art ad desig to a wide audiece. This is part of the Museum s foudig missio ad i 2007 we celebrated 150 years of fulfillig it at South Kesigto by ivitig 150 leadig practitioers to cotribute to a commemorative album. The album, which icluded work by Maolo Blahik, Lord Rogers, Julia Opie, Bejami Zephaiah, Tracy Emi, ad Viviee Westwood, was displayed i the Grad Etrace. The messages i these cotributios demostrated the high esteem ad affectio with which artists ad desigers regard the V&A, may ackowledgig the ispiratio they have foud here. It is cetral to 7

our missio that the V&A cotiues to ispire ew geeratios of makers ad cosumers, cotributig to the success ad growth of the UK creative ecoomy. I 2007/08, 782,900 (34%) of visits to South Kesigto were made by practitioers ad teachers i the creative idustries ad studets. Aother facet of the partership with the Crafts Coucil was COLLECT, the prestigious cotemporary craft fair, which was held at the V&A for the fifth ad last time i Jauary 2008, attractig over 10,000 visits. The V&A acquired 13 objects through gift ad purchase. I its ow developmets ad activities, the V&A uses a rage of established ad ew desigers. Awards i 2007/08 iclude: Wier of a RIBA Award 2007 for Outstadig Desig for the MoC redevelopmet, phase 2 (Caruso St Joh Architects) Wier of a CABE Festive Five Award 2007 for the MoC redevelopmet, phase 2 (Caruso St Joh Architects) Wier of the FX Iteratioal Iterior Desig Awards 2007 for the V&A Café (MUMA) VAE is a importat cotributor to fulfillig the Museum s missio. I 2007/08 the specially commissioed retail rage ispired by the collectios, Cherry o the Cake, was exteded to iclude a ew rage of jewellery to be lauched i sprig 2008 to accompay the re-opeig of the William ad Judith Bolliger Jewellery Gallery. The desigers participatig i Cherry o the Cake 2 iclude Betty Jackso, Joh Rocha, Grayso Perry, Dita vo Teese, Vicky Ambery Smith, Barbara Hulaicki ad Theo Feell. Filmig is becomig a sigificat activity for VAE alogside other types of corporate hire, ad Licesig ad V&A Images are highly active i supportig the creative idustries. V&A Publishig lauched 19 ew titles ad three V&A books i paperback for the first time. The V&A rus the aual V&A Illustratio Awards, is a co-sposor of the Classic Desig awards ad, i 2007/08 showcased the fialists i the ew bieial Sculpture prize. The V&A + RIBA Architecture Partership There were three temporary displays withi the Architecture Gallery i 2007/08: The Royal Festival Hall Revival; The Holiess of Beaty: GF Bodley (1827-1907) ad his Circle; ad Usee Hads 100 years of Structural Egieerig. Learig evets were ispired by the HLF-fuded acquisitio of CR Cockerell s Tribute to Sir Christopher Wre, ad there was a cosultatio evet for HE tutors. Operate with fiacial ad orgaisatioal efficiecy Efficiecy ad effectiveess The fact that visit umbers at V&A Lodo sites fell ad GIA rose meas that the efficiecy measure of GIA per visit shows worse performace i 2007/08 ( 15.93) compared to 2006/07 ( 13.61). However, whe all users (V&A sites + V&A tourig exhibitios + web visits) are take ito accout, the positio is reversed ad GIA per use fell by 13% ( 1.49 i 2007/08; 1.71 i 2006/07). Market research surveys cosistetly show that 97-100% of visitors cosidered their visit very good or good. The Museum has expaded its programme of user cosultatio from developmet projects to exhibitios, with a series of focus groups i early 2008 that looked at titles ad cotet. Collectios I additio to regular collectios audits, the V&A cotiued a special programme to review object locatio ad has effected sigificat improvemets. Security ad safety measures cotiued to be upgraded accordig to a phased programme ad there were o icideces of theft or malicious damage. Progress was made i Busiess Cotiuity Plaig ad emergecy respose as they relate to collectios. 3. Exhibitios & Cotemporary Provide optimum access to collectios ad services for diverse users 8 Exhibitios ad displays at V&A sites Headlie Exhibitios Surreal Thigs: Surrealism ad Desig ( 29 March 22 July 2007), 129,900 visits

James Atheia Stuart 1713 1788: The Rediscovery of Atiquity (15 March 24 Jue 2007), free visit umbers ot collected The Golde Age of Couture: Paris ad Lodo 1947-1957 (22 September 2007 6 Jauary 2008), 197,200 visits The Art of Lee Miller (15 September 2007 6 Jauary 2008), 78,900 visits Chia Desig Now (15 March 13 July 2008), ogoig Thomas Hope: Regecy Desiger (22 March 22 Jue 2008), ogoig Cotemporary exhibitios Kylie: The Exhibitio (8 February 10 Jue 2007), 271,100 visits Ucomfortable Truths: the shadow of slave tradig o cotemporary art ad desig (20 February 17 Jue 2007), istallatios throughout Museum specific visit umbers ot collected Out of the Ordiary: Spectacular Craft, (13 November 2007 17 February 2008), 83,200 visits Theatre ad Performace exhibitio Collaborators: UK Desig for Performace 2003-2007, 62,600 to 30 March 2007 (exhibitio cotiues) Fashio displays (visit umbers ot collected) New York Fashio Now (17 April 23 September 2007) Cetral Asia Ikats from the Rau Collectio (5 November 2007 30 March 2008) Cotemporary commissios ad istallatios Simo Perito Ati Room of the Mae Quee, Tuel, Campaa Brothers, Vitoria Regia seats, Garde Zaha Hadid Swarm chadelier, Grad Etrace V&A Museum of Childhood exhibitio Space Age (24 November 2007 6 April 2008), free specific visit umbers ot collected I additio, umerous diverse displays were mouted throughout the year. Natioal ad Iteratioal Iteratioal tourig exhibitios Title Veue Dates No. of visits* Viviee Westwood: Fie Arts Museums of Sa 24 Feb 07-10 Ju 07 145,500 A Retrospective Fracisco (De Youg) Moderism Ciema Idia: the Art of Bollywood Palazzo Reale, Mila 22 Sep 07-20 Ja 08 135,000 Corcora Gallery of Art, 17 Mar 07-29 Jul 07 93,000 Washigto DC Natioal Gallery of Victoria, 9 Mar 07-20 May 07 8,800 Melboure, Australia Masterpieces of Ukiyo-E Powerhouse, Sydey 6 Ju 07-11 Nov 07 29,200 Ota Memorial Museum of Art, 1-27 May 07 & 1-26 25,400 Tokyo Ju 07 (show i 2 halves) Ishikawa Prefectural Museum 21 Jul 07-19 Aug 07 24,800 of Art Hagi Uragami Museum 1 Sep 07-9 Oct 07 10,000 Matsuzakaya Art Museum, 20 Oct 07 18 Nov 07 39,900 Nagoya Kobe City Museum 12 Ja 08 17 Feb 08 67,500 9

Title Veue Dates No. of visits* Medieval ad Reaissace Art Gallery of Otario, Toroto 23 Ju 07-7 Oct 07 68,700 Treasures Norto Museum of Art, West 23 Oct 07-6 Ja 08 19,200 Palm Beach Speed Art Museum, Louisville 22 Ja 08-20 April 08 14,400 The Art of Lee Miller Philadelphia Museum of Art 26 Ja 08-27 Apr 08 49,000 Surreal Thigs: Surrealism ad Desig A Cetury of Olympic Posters Masterpieces i Ceramics Idia ad SE Asia Sitters (Curated by Lucie de Guise)# Museum Boijmas Va 29 Sep 07-13 Ja 08 83,000 Beuige, Rotterdam Guggeheim, Bilbao* 3 Mar 08-7 Sep 08 Capital Museum, Beijig 15 Ja 08-28 Feb 08 70,100 Liaoig Museum, Sheyag, Chia* 10 Mar 08-27 Apr 08 The Korea Foudatio Cultural 14 Mar 08-23 Ju 08 Cetre Seoul* Malaysia Museum of the Arts 5 Apr 07-31 Aug 07 21,000 Daisy of Pless# Łacuk Palace, Polad 1 May 07-31 Jul 07 8,700 Zamoyski Palace Museum i 5 Oct 07-Feb 08 6,800 Kozlowka, Polad * Visit umbers for these shows will be reported i 2008/09 # These shows did ot cotai Museum objects V&A UK: tourig exhibitios Title Veue Dates No. of visits* Cotemporary Photography Somethig that I ll ever really see Saisbury Cetre for Visual Art, Norwich 1 May 07 24 Ju 07 9,500 Domestic Idylls: Clemetia Lady Hawarde Arts Depot, Fichley 24 Ja 08 31 Mar 08 2,600 Oriel Davies Gallery, 8 Sep 07 20 Oct 07 13,200 Newtow, Powys 10 Where are we? Questios of Ladscape Out of the Ordiary: Spectacular Craft Ucomfortable Truths Must-have Toys Leamigto Spa Art Gallery 25 Ja 08 6 Apr 08 20,700 ad Museum Graves Art Gallery, Sheffield 20 Sep 07 5 Ja 08 13,800 Shipley Art Gallery, Tye & Wear* 22 Mar 08 1 Ju 08 Salford Museum ad Art 30 Ju 07 2 Sep 07 17,800 Gallery Feres Art Gallery, Hull 15 Sep 07 6 Ja 08 36,400 Royal Corwall Museum, 17 Feb 26 May 07 33,500 Truro Museum of Childhood, 16 Ju 21 Oct 07 23,200 Sudbury Hall, Ashboure, Derbyshire

Title Veue Dates No. of visits* The Dressig Room Solihull Arts Complex 14 Mar 07 8 May 07 5,000 Photographs of Actors by Simo Aad Capturig the Momet Reg Welsh Milleium Cetre, 7 Ja 08 15 Feb 08 4,500 Wilso Cardiff Worcester Art Gallery 18 Feb 08 5 Apr 08 3,100 Oliver Messel: Makig ad Doig# Royal exchage Theatre, Machester * Visit umbers for these shows will be reported i 2008/09 # These shows did ot cotai Museum objects 3 Sep 07 20 Oct 07 30,000 Cotemporary evets Cotemporary exhibitios ad commissios are metioed above at 3.1. I additio the dedicated Cotemporary team rus the mothly Friday Late programme. Held o the last Friday i every moth (except December) whe the Museum is ope from 10.00 to 22.00, Friday Late icludes a mixture of live performaces, cuttig-edge fashio, debates, oe-off displays, special guests, bar ad food, guest DJs ad late-ight exhibitio opeig. Admissio is free to the museum although some evets may be ticketed. Friday Lates attract, o average, 3,000 visits (eterig the V&A after 5.30 pm) April Ritual: iteratioal music ad visual culture explorig the depth ad breadth of the Africa Diaspora rituals ad traditios. May Surrealist Ball: a decadet ight of the uexpected ad iexplicable featurig performace, music ad image. Jue Sig Lodo: the te day Lodo-wide Sig Lodo festival was lauched with a magical sigig extravagaza at the V&A. July Village Fete 2007: V&A ad Scarlet Projects cotemporary take o the traditioal Eglish fete, providig a extraordiary array of creative, fu, egagig ad imagiative evets ad games. August Idia Now: part of the Idia Now seaso, the eveig showcased the best i cotemporary Idia art, fashio, film ad desig. September Create: Friday Late wet o the road at the V&A Museum of Childhood for a ight dedicated to all thigs creative, playful ad imagiative. October Who s Afraid of the Dark?: i celebratio of all thigs spooky ad strage, the V&A kept its doors ope past midight for the first time for a ight of ghostly tours, storytellig, spooky soud ad light scapes, freaky make-up ad photography workshops. With 4,300 visits, this was the most popular Friday Late of the year. November Craftig Couture: explored the hadicraft ad skill that goes ito creatig couture garmets through workshops i 1950s make-up, fabric drapig ad embroidery, a series of performaces by the Eglish Natioal Ballet School ad film screeigs. Jauary Oe of a Kid: a ight of istallatios, demostratios, workshops ad special evets that explored the cocept of the bespoke, the hadmade, uique ad flawed where o two thigs are the same (orgaised with the Crafts Coucil). February Collaborate: Theatre desigers took cetre stage ad visitors were immersed i a ight of site specific istallatios, performaces ad soudscapes by performace ad theatre desigers. March Subterraea: To celebrate the uveilig of the ew V&A tuel istallatio Seasos through the Lookig Glass by architect CJ Lim (o display util March 2009), visitors were able to explore the uofficial, hidde city through movig image, music ad talks by leadig architects, writers ad musicias. 11

Fashio i Motio The free full-scale catwalk shows, origiated i the Cotemporary programme ad cotiue to be extremely popular. I 2007/08 the featured desigers were Gareth Pugh ad Maish Arora. Sice 2006, the V&A has had a formal partership with the Crafts Coucil. I additio to the fifth ad fial COLLECT fair, the Crafts Coucil had a display area i the V&A Shop. Out of the Ordiary: Spectacular Craft was the first i a series of craft-based exhibitio to be held every three years, ad was accompaied by a Friday Late evet. 4. Educatio, Learig & Iterpretatio Provide optimum access to collectios ad services for diverse users The total umber of participatios i orgaised educatioal activities i 2007/08 was 351,300. Of these, 171,200 were childre aged 15 ad uder ad, of these, 106,000 were school pupils. The Diversity iitiatives ad programmes described above are led by the Access, Social Iclusio & Commuity Developmet team withi the Learig & Iterpretatio Divisio (L&I), ad the core V&A UK Partership project, Image & idetity, is co-ordiated by Learig Services. L&I also icludes the Gallery Iterpretatio & Resources team that is resposible for user cosultatio ad evaluatio. The MoC has its ow learig team, which filled the doubled capacity for formal learig sessios provided by the redevelopmet, as well as providig daily activity sessios. The programmes also icluded Wodertots for uder- 5s ad their parets/carers, ad icreasig provisio for adults, ad a rage of commuity projects. The V&A Theatre Collectio maitaied a educatio programme at Covet Garde after the Theatre Museum site closed to the public i Jauary 2007 util August 2007. Followig trasfer to South Kesigto, learig evets were provided to accompay Kylie The Exhibitio, ad theatre ad performace programmes resumed, associated with the Collaborators exhibitio. From Jauary 2007, late ight opeig moved from Wedesdays to Fridays ad the offer was refreshed (last Friday of each moth remais a Cotemporary Friday Late evet). Talks ad debates have featured some very popular ad high-profile figures such as Sajeev Bhaskar, Mark Lawso, Zadra Rhodes, Eri O Coor, Ozwald Boateg ad Stephe Bayley. The websites are importat learig resources ad ew cotet is added cotiually, icludig exhibitio microsites, teachers resources, iteractive games ad may opportuities to egage i creatig ad debatig art ad desig. As well as maitaiig services throughout 2007/08, a priority at South Kesigto was preparig for the ew Sackler Cetre for arts educatio at the V&A, which opes i July 2008. Occupyig two floors of the Hery Cole Wig, the Sackler Cetre will more tha double the space curretly allocated to educatio i the Museum ad will accommodate iformal ad self-directed learig as well as formal educatio. Iovatios iclude practical art studios, display space ad artist residecies. The Museum s learig programmes, projects ad evets are too umerous to list comprehesively so oly some highlights are give below to illustrate the rage of the offer. V&A South Kesigto Free Art Fu!: Regular programmes of creative activities for families, based o the collectios ad ru i school holidays. Itercultural/Iterfaith Tours: For groups of adults ad youg people from a diverse rage of orgaisatios such as Chithurst Buddhist temple, Sisters i Islam, The Ismaili Cetre, the Jewish Museum, Asia Wome s Advisory Cetre, Sai school (Hidu). Summer i the City: series of practical ad art-history courses for adults. Old Roots-Nu Shoots Photo-jouralism ad film makig pilot project: A youth iclusio project that aimed to itroduce participats to ew skills i museum research, stills photography ad film makig. The project was be show o the 24 Hour Museum website with a lik to the V&A ad East Potetial websites. There was also a screeig of the images ad the film at the V&A. Fuded by the British Coucil i partership with the Museum of Lodo (24 Hour Museum) ad East Potetial, a Europea charity (Foyer Associatio) that supports excluded youg people. 12

Explore Saudi Arabia: 30th October 1st November: A three day evet of traditioal music, storytellig ad art showcasig Saudi Arabia culture took place i the Raphael Gallery to coicide with the visit of the Kig of Saudi Arabia to the UK. A selectio of historical photographs documetig the friedship betwee the UK ad Saudi Arabia was also displayed. Chiese Mid-Autum Festival: Mid-Autum festival that icluded a later-makig workshop, Chiese chess, bead craft ad butto-kottig demostratios, ad drago headdress-makig workshops. There was also a good mixture of performaces, with martial arts, Diablo ad magic. Creative Quarter: The V&A, RCA, Imperial College Lodo ad the Sciece Museum held a Creative Quarter day o 9 November. The evet gave a isight i to the creative idustries for 13-19year olds. At the V&A Sir Christopher Fraylig, Zadra Rhodes ad Merli Crossigham from Aardma Aimatio gave presetatios. There were workshops, demostratios ad iformatio about career pathways throughout the Museum, ad over a thousad youg people booked to take part. This is a Exhibitio Road Cultural Cosortium project, led by the V&A. Architecture Ope Day: Opportuities to visit the Study Rooms, meet curators ad view highlights from the V&A ad the RIBA s Drawigs ad Archives collectios, culmiatig i a tour by architects Allies ad Morriso of the Royal Festival Hall Revival display i the Architecture gallery. The day s evets icluded a behid-thescees architectural tour of the V&A ad a architectural tour alog Exhibitio Road. How Places Work Royal Festival Hall: Year 9 school studets were give a ispirig tour of the recetly refurbished Royal Festival Hall by architect Simo Frazer from Allies ad Morriso followed by curator-led tour of the RIBA + V&A Architecture Gallery exhibitio Royal Festival Hall Revival ad a architect-facilitated workshop where studets developed their ow resposes to the origial egg i the box desig cocept for the Royal Festival Hall A partership project fuded by the Commissio for Architecture ad the Built Eviromet. Youg People s Fashio Summer School: Three summer schools with professioal desigers ad makers that gave a itroductio to fabric desig, garmet desig ad makig for youg people aged 11-13, 14-15 ad 16-18. ReachOut RCA + V&A: pilot programme of workshops with the Royal College of Art (RCA) to itroduce school studets to origial creative art ad desig practice ad higher educatio pathways. V&A Scree: piloted, startig with the Surreal weeked. Movig Forward: New Directios i Trasport Desig Symposium: brought together desigers of trasport, termials ad iterchages ad facilities etc. (orgaised with the RCA). Ispired By...: aual competitio for adults i part-time art ad desig educatio: 224 etries, of which 55 were displayed i the V&A ad at MoC (i partership with the Natioal Istitute for Adults ad Cotiuig Educatio). Ispired By... was also ru at UK Parter orgaisatios i Tye & Wear ad Machester. Kylie The Exhibitio Evets: Sigalogs, twice-weekly performaces by Little Lights Theatre (icludig special performaces for groups with disabilities), ad talks/workshops for people with disabilities. V&A Museum of Childhood Old Skool New School: a collaborative project betwee the V&A Museum of Childhood ad Lodo College of Fashio about what the childre of tomorrow will be wearig, ad providig a display for the MoC Frot Room gallery. Recycled Toys: recycled toy makig workshops for local schools ad families i partership with Tower Hamlets Waste Educatio Project. Eve Sparrows Ca Sig: a performace by Hackey school choirs as part of the Mayor of Lodo s Sig Lodo Campaig. MOC Summer Festival: live music, dace, walkabout acts, art activities, stalls, food ad games is targeted at a local o traditioal audiece ad attracted 2,500 visitors. Big Draw: The MOC was oe of the lauch veues for the aual evet opeed by Queti Blake i ad pre-lauch workshops for Big Draw Goes East took place i local primary schools. Art Breakers: art club o Saturdays for 11-14 year olds desigig 3D cities ad creatures. 13

History of the East Ed: course held i collaboratio with Birkbeck College. Creative Mids: programme for people of all ages is. It has recetly icluded: Wodertots, weekly sessios for uder 5s ad their parets or carers explorig fashio ad puppetry through art, storytellig, drama ad movemet; adult craft workshops creatig toys ad dolls usig paitig, batik ad embroidery. Fuded primarily by the Foudatio for Sport & the Arts ad the Jack Petchey Foudatio. Voluteers The V&A uses voluteers for a rage of activities i pursuit of its objectives ad they make a sigificat cotributio. Voluteers approach the V&A through differet routes, ad Departmets make use of them to varyig extets. It is estimated that c.200 idividuals voluteer i the V&A (excludig studets o work placemets, iters, secodees from other orgaisatios etc.). They work i differet periods ad patters, so o full time equivalet value has bee ascribed to their cotributio i terms of either hours or moey. The mai areas of voluteer activity are give below: Frieds of the V&A: assist i the Frieds office; staff the Frieds recruitmet desk i the galleries; assist at Frieds evets. Traiig evets provide opportuities to keep abreast of developmets i the Museum. Visitor Services: staff the Iformatio Desks at public etraces; provide free guided tours for visitors. Voluteers o the Iformatio Desk are oversee by a Gallery Maager while the guided tours are maaged by the Learig & Iterpretatio Departmet. Voluteers are provided with appropriate traiig ad support ad are kept iformed about the Museum via a mothly ewsletter. Geeral admiistrative support: assistig Museum staff i a rage of tasks, ofte thigs that would ot otherwise get doe, or would ot be doe so efficietly, such as maiteace of files. POLICY IN RELATION TO DISABLED EMPLOYEES The V&A policy i relatio to disabled employees forms part of the Museum s Diversity Policy ad is stated i the Staff Hadbook (Sectio E5).The opeig policy statemet is: The Victoria & Albert Museum is committed to equal opportuities for all its employees ad potetial employees. All idividuals will be treated or cosidered for employmet ad advacemet o the basis of their relative merits, abilities ad qualificatios. The aim of this policy is to esure that every employee, prospective employee or perso coected with the V&A will receive equally favourable treatmet regardless of their geder, marital status, sexual orietatio, race, ethic/atioal origis, colour, disability, religio or belief ad membership/o-membership of a Trades Uio. The V&A is committed to makig this policy effective ad will cotiually moitor ad review the Museum s employmet practices. Harassmet, discrimiatio or victimisatio o the grouds listed above are uacceptable to the V&A i its role both as a employer ad as the provider of a importat public service. The V&A s seior maagemet team cotiues to make a sigificat commitmet to disability, takig a itegrated approach to both audieces ad staff. Followig the success of the British Galleries developmet i 2001, where a Access Cosultat was employed for the first time, disability has bee firmly o the museum s ageda. A dedicated Disability Ad Access Officer was appoited i 2002. The Maagemet Board ad Board of Trustees siged up to the Access, Iclusio ad Diversity Strategy i 2003 ad to the Disability Actio Pla i March 2004. Fudig for disability iitiatives was agreed i 2004, with a additioal 65K allocated for year 1 delivery agaist the Disability Actio Pla. Sice 2002 there has bee a Board-level Diversity Champio. There is specific iclusio of disability equality withi the 5 year Strategic Pla. The V&A was grated Disability Two Ticks symbol-user status i sprig of 2003 ad has had this re-edorsed i sprig 2005. The V&A siged up to the Employer s Forum o Disability Disability Stadard i sprig 2005, a atioal bechmarkig survey spaig service delivery, educatio ad employmet of disabled people. The V&A s Disability Equality Scheme was published i 2006. 14

Disability Actio Pla The purpose of the V&A s Disability Actio Pla (2004/07) is to help the museum focus o areas covered by the Disability Discrimiatio Act ad to complemet Museum policies such as Access for Disabled People; the Access, Iclusio ad Diversity Strategy, ad the Diversity Policy. Its purpose is to help the Museum achieve equality i employmet, service provisio, access to premises ad educatio, ad it aims to show how through chagig attitudes, the developmet of parterships ad icreased expertise the V&A ca cotiue to be proactive i recogisig ad removig the barriers which disabled people face i accessig the museum i differet ways. It is also a recogitio that improvig provisio for disabled people will create a eviromet which will be accessible to all users. Disability Equality I cosultatio with the Staff Disability Forum, a rage of employmet activities have bee idetified which are ow beig progressed. I 2007 we established a relatioship with Status Employmet, a orgaisatio that supports people with metal health disabilities ito employmet, particularly those who are log-term uemployed. We aticipate stregtheig this relatioship durig 2008 as we lauch our policy ad iitiatives to help maage psychological health at work. A Disability Homepage has bee lauched o the staff itraet. It is a cetral resource o disability which brigs together iformatio o the work that is happeig across the museum to support disabled staff ad visitors. The publicatio of a cetral, aoymised register of reasoable adjustmets ad a stadard procedure for hadlig their implemetatio will be priorities for 2008, alog with fialisig Maagemet Guidace o Maagig Staff with Disabilities. Disability ad the V&A Strategic Pla The V&A s Strategic Pla articulates the broad strads of activities ad major goals that the Museum will work towards over the ext five years. Oe of the strategic objectives idetified is the provisio of optimum access to collectios ad services for diverse audieces, both ow ad i the future. This icludes a commitmet to icreasig the diversity of its persoel ad developig a more diverse pool of museum sector recruits, ad to icreasig cosultatio with stakeholder groups, icludig employees. Actio take to maitai or develop the provisio of iformatio to, ad cosultatio with employees There are several ways by which the Museum regularly keeps staff iformed of plas ad progress: I 2004/5 the V&A embarked upo Culturepla. This log-term project complemets FuturePla by focusig o people rather tha buildigs ad collectios. The aim is to improve public service by embodyig the Museum s values i the way its people work, thus makig the Museum a more, efficiet, effective ad satisfyig place to work. A etwork of champios ad maagers has beig established throughout every Departmet to idetify the thigs staff wat to chage ad ways to achieve this. Durig 2007/08 CulturePla Champios meetigs have icluded Q&A sessios with seior maagers, which have bee very well received. Itraet: Reviewed i 2007/08 as a CulturePla iitiative with a museum-wide pael of cotet editors. The improved versio will be lauched i Jue 2008. Maagemet Board Bulleti: sice 2005, a summary of the key poits from fortightly Maagemet Board meetigs has bee circulated to middle ad seior maagers as soo as possible after each meetig usually o the same day. From Jauary 2008, a similar Bulleti has bee produced for Board of Trustee meetigs ad is circulated with the subsequet MB Bulleti. Teambrief: a iformatio bulleti distributed mothly to all staff. From May 2006 this has icluded most items from the Maagemet Board Bulleti ad the Director s Report to the Board of Trustees, ad from 2007, the Board of Trustees Bulleti. The full Director s Reports are available via the Itraet. From May 2006 a staff feedback ad respose mechaism was also itroduced to Teambrief. All these developmets have bee very well received by staff. The V&A operates a scheme uder which staff may observe meetigs of the Maagemet Board. Miutes of Maagemet Board meetigs are posted oto the Itraet. 15

Meetigs for all staff four times per year at which topical items are preseted ad commets ivited. Museum represetatives meet the Trade Uios Side i the Joit Cosultative Committee every two moths: I additio, formal pay egotiatios betwee the maagemet ad trade uio sides occur as required. A two year pay deal for 2007/8 ad 2008/9 was egotiated ad agreed this year. For matters of orgaisatioal chage etailig chages i the workplace, staff are cosulted via their trade uio represetatives or o a idividual basis. The V&A Strategic Pla is available via the Itraet ad the V&A website. Hard copy is set to all Departmets for local distributio ad a summary is circulated with Teambrief. I Jauary 2008 a checklist of progress o all 2007/8 milestoes was published o the Itraet. As part of the plaig cycle a series of four workshops is held for groups of c.15 seior ad middle maagers with the Director, Director of Fiace ad Head of Plaig. These promote dialogue o the key issues facig the Museum. The otes are published o the Itraet. I 2006 the Museum bega to publish iterally all the text submitted by budget holders i support of their budget bids (Budget Commetaries). I 2007, Departmet Plas were also made available o the Itraet. The Museum s success i improvig iteral commuicatios through greater cosultatio ad trasparecy is evideced by staff feedback i the review of Ivestors i people status. Betwee 2004 ad 2007, staff reported that they had a much greater uderstadig of the Museum s strategic plas ad their ow role i deliverig them. 16

FINANCIAL REVIEW The accouts have bee prepared i a form directed by the Secretary of State with the coset of the Treasury i accordace with the Museum ad Galleries Act 1992, ad i accordace with the Statemet of Recommeded Practice Accoutig ad Reportig by Charities. For 2007/8 the Museum s result was break-eve (2006/7 surplus of 0.04m) o its core operatioal (urestricted) accout (see ote 21). At the begiig of the year the museum had budgeted to make a surplus of 100k. The Museum had a good year fiacially, exceeded this target ad the Trustees were therefore able to desigate the additioal fuds to a umber of capital projects due to take place i 2008/09 (see below). Visitor umbers ad admissio ticket icome for The Golde Age of Couture ad Lee Miller exceeded targets sigificatly. The success of these exhibitios had a major positive impact o the Museum s retail operatios. Target icome from corporate hire was also exceeded; the chage of the Museum s late opeig from Wedesdays to Fridays cotributed to this achievemet. Icome from exhibitio tours was also higher tha budget as a result of a umber of additioal atioal ad iteratioal veues takig the V&A s exhibitios. Cost savigs have bee achieved through delays i recruitig for vacat posts ad tight cotrol of operatig expediture. A full year s worth of cost savigs arisig from the closure of the Theatre Museum site i Covet Garde i Jauary 2007 has also bee realised. These savigs will be reallocated to web developmet, digitisatio ad coservatio of the theatre collectios. The successful year has allowed the V&A to allocate fuds towards improvig IT data storage, udertakig buildig refurbishmets ad payig for a major relocatio of storage facilities from Battersea i Lodo to Wiltshire. However the Museum remais cocered that expediture o maiteace ad o gallery displays ad visitor services is still below optimum levels. Durig the year 10.46m has bee spet o FuturePla projects, fuded maily by private doors ad public bodies such as the Heritage Lottery Fud. The fiacial stability ad flexibility of the Museum eeds to be uderpied by a soud level of reserves. The accouts record total fuds of 420m (see ote 14) which icludes fuds which represet the market value of ialieable property ad restricted fuds give for specific projects, either of which would be available for the geeral fiacial support of the Museum. The Trustees have access to oly the combied total of certai Geeral, Desigated ad Bequest fuds which stad at 8.72m (2007: 6.54m see ote 15). The reserves rose as a result of the additioal icome ad cost savigs made durig the year (oted above) ad also because of a improvemet i the value of ivestmets. Reserves Policy The Trustees aually review the level of readily available reserves (those that are ot restricted or tied up as fixed assets) appropriate to the scale, complexity ad risk profile of the orgaisatio. Though grat-i-aid accouts for approximately 54% of the Museum s icome (excl. The Heather Trust for the Arts Edowmet cosolidated this year), the remaider of operatioal costs must be fiaced by self-geerated icome (such as exhibitio icome ad tradig), which is volatile. This risk is maaged through the Museum s policy to maitai geeral ad desigated fuds ad is reviewed aually. The Trustees also cosider that reserves are required to provide a soud uderpiig, i terms of cash flow plaig ad budgetary risk to ogoig ivestmets i the capital ifrastructure at the South Kesigto site ad at the Museum of Childhood. Takig a overall view of the aual operatioal activities, the level of self geerated icome, grat-i-aid ad the plaed sped o capital projects, the Trustees believe that the miimum level of geeral ad desigated fuds should be at least 3.2m. This level of reserves equates to three moths of the Museum s o GIA fuded operatig expediture. However, this miimum level may ot be adequate over the ext few years give that the Museum is curretly udertakig a umber of major capital projects icludig the Medieval ad Reaissace galleries ad the Ceramics Galleries. 2.8m is cosidered to be adequate to cover cash flow risks, ad this added to the miimum level of reserves meas that the Museum s targeted level of reserves has bee set at 6.0m. Agaist this level the Museum had reserves of 5.74m at 31 March 2008. 17

I additio to this 5.74m the Trustees also had access at 31 March 2008 to 2.98m, which has bee desigated by them for specific projects icludig 1.07m for the Theatre Collectios (from the icome relatig to the surreder of the Theatre Museum lease) ad the projects oted i the Fiacial Review above: 0.2m for improvig IT data storage, 0.85m for buildig refurbishmets, ad 0.19m for the relocatio of storage facilities from Battersea i Lodo to Wiltshire. Further to the existig targeted level of reserves of 6.0m, the Trustees believe that it would be prudet to reassess this level i the cotext of the difficult ecoomic climate ad its potetial impact o tradig icome ad reveue ad capital fudraisig. Therefore the Trustees wish to icrease the level of targeted reserves by the equivalet of a additioal two moths of o GIA fuded operatig expediture, which would be a further 2.1m. The Trustees also believe that icreasig the level of the Museum s permaet edowmet reserves remais cetral to the loger-term fiacial stability of the Museum. Ivestmet policy The V&A s ivestmets are curretly maaged by Sarasi Chiswell. The Museum s ivestmet policy is reviewed aually by the Fiace Committee at a meetig with the ivestmet maagers preset. At this meetig the Committee is give a update o preset market coditios, based o which the members agree o the riskretur profile to be adopted for each of the Museum s three o GIA ivested fuds amely restricted, urestricted ad permaet edowmets. At the Jue 2006 meetig, the Committee discussed the level of risk the Museum would be prepared to bear o its ivestmets ad the associated retur, ad cocluded that a mid level retur-risk mix would be most appropriate. They also agreed that purchasig power must be maitaied ad that the ivestmet policy must pay attetio to sustaiability. As a result, the Museum trasferred its ivestmets to a charities commo ivestmet fud with a 60% cap o equity i order to mitigate excessive risk o ivestmets whilst improvig returs. The fud is govered by the Trustees Act 2000. At their meetig i October 2007, the Committee decided that to maximise the log-term value of the Museum s fuds, the o fixed iterest ivestmet portio of the permaet edowmet fuds should be gradually icreased to up to 90%. They also agreed that a more prudet strategy should be adopted for the restricted fuds as the costructio of the Medieval ad Reaissace Galleries has begu. The market value of ivestmets was 15.68m at 31 March 2008. The icome eared durig the year o each of the fuds averages as follows: Urestricted 8% Restricted 9% Permaet edowmet 5% The Trustees cosider these to be acceptable rates of retur for the market coditios prevalet i 2007/08. Note: the above figures relate to the Museum s Ivestmets, ad do ot iclude the Ivestmets cosolidated from the Heather Trust for the Arts i relatio to the Gilbert Collectio (see below). Fixed Assets Durig the year, the Museum at South Kesigto was revalued at 323.9m by Gerald Eve, Chartered Surveyors, the Museum of Childhood at Bethal Gree at 13.0m ad a third of the site at Blythe House at 7.3m. The depreciatio charge for the year was 8.302m (2006/07: 8.909m). Paymet policy The Museum s expressed itet is to adhere to the Govermet s stadard o bill payig by aimig to settle bills withi the 30 day terms of the Museum s stadard cotract. From a sample, we ca project that over the past year the average time for paymet of ivoices ot subject to query was 30 days (2007: 29 days). 18

Tradig Compaies The Museum ows 100% of the issued share capital of V&A Eterprises Limited which carries out tradig operatios o behalf of the Museum. These accouts cosolidate the results of the Museum (that is grat-fuded activities ad the Museum s Developmet, Trust ad Bequest fuds) with those of V&A Eterprises Ltd. As at 31 March 2008, VAE was due to make a gift aid paymet of 1.79m, which trasferred the balace of its taxable profits, to the Museum. The Museum also ows 100% of the issued share capital of V&A Holdigs Limited which i tur ows 100% of the issued share capital of V&A Limited which ra the V&A Golde Age of Couture Gala o behalf of the Museum durig the year. These accouts have also bee cosolidated with the results of the Museum. As at 31 March 2008, V&A Limited was due to make a gift aid paymet of 0.18m, which trasferred the balace of its taxable profits, to the Museum. The Gilbert Collectio I March 2008 the V&A etered ito a agreemet with the Heather Trust for the Arts (custodias of The Rosalide ad Arthur Gilbert Collectio, a collectio of silver, gold, micromosaics ad gold boxes) to display this substatial collectio at the V&A. The agreemet has bee siged by all stakeholders: the Natioal Heritage Memorial Fud, The Gilbert Public Arts Foudatio, the Gilbert Collectio Trust, the Victoria ad Albert Museum ad the Heather Trust for the Arts. Uder the agreemet the Gilbert Collectio (retured by the Gilbert Collectio Trust) has bee placed by the Heather Trust o loa with the V&A. O the 18 March 2008 effective cotrol of the Heather Trust for the Arts passed to the V&A as part of the agreemet metioed above. The V&A has effective cotrol of the Board of the Heather Trust for the Arts with the appoitmet of related idividuals oto the Board of the Heather Trust for the Arts ad accordigly its results have bee cosolidated ito the museum s results. Political Gifts/Doatios The V&A makes o political gifts ad as a charity itself does ot ormally make doatios to other charities. 19

REMUNERATION REPORT Membership The membership of the Remueratio Committee comprised the followig Trustees: Paula Ridley Trustee (Chair of Board of Trustees ad of the Remueratio Committee to 31 October 2007) Samir Shah Trustee Paul Ruddock Trustee (Chair of Board of Trustees ad of the Remueratio Committee from 1 November 2007) Jae Gordo-Clark Trustee (Appoited durig 2007 for the purpose of determiig the 2008/09 pay award; Retired from the Board of Trustees o 31 March 2008) The Director, Mark Joes, Deputy Director, Ia Blatchford, ad Head of Huma Resources, Alla Hill were i attedace except whe matters related to their ow pay ad performace were discussed. Remueratio policy for seior maagers The Remueratio Committee reviews salaries of all seior maagers employed by the Museum o seior maager cotracts. The cotracts provide for stadard Museum terms ad coditios of employmet except where they apply to pay determiatio which is subject to review by the Remueratio Committee. The Committee also cosiders the pay of two staff employed by V&A Eterprises: the Developmet Director ad the Chief Executive of V&A Eterprises. I 2007/8 the Committee cosidered the pay of 29 people i total icludig the Director. At the begiig of the year, seior maagers are set objectives based o the Museum s strategic pla. At the ed of the year, their performace is assessed agaist objectives by the Director (or other seior maager). The methodology eables a assessmet of performace to be made agaist objectives ad where it ca be demostrated that performace has exceeded expectatios, a idividual ca be omiated for a bous paymet. The omiatios are subject to approval by the Remueratio Committee. The Chairma of the Board of Trustees udertakes the performace assessmet for the Director. The aual performace assessmets ad additioal iformatio (see below), are the reviewed by the Remueratio Committee ad used to set pay levels ad ay performace bouses. Performace assessmet ad paymet Whe determiig salary levels ad performace bouses, a umber of factors are take ito accout: the projected budget for the aual staff settlemet ad the overall icrease for staff i post (ISP) percetage that has bee agreed as part of the Museum s pay remit salary levels iterally ad i the market place (through salary surveys) job size ad whether this has chaged over the period (through formal evaluatio, where applicable) the performace ad cotributio of the idividual over the period (through performace appraisal) geder peer equality As with bous paymets for staff subject to collective bargaiig arragemets, seior staff bouses are discretioary ad are awarded where performace agaist objectives is rated as exceptioal. They accout for a proportio of total remueratio, up to a maximum bous percetage of 5.5% i the 2007 performace year, are o cosolidated ad subject to the overall fiacial limits agreed as part of the Museum s pay remit. Policy o duratio of cotracts, otice periods ad termiatio paymets Seior staff (icludig the Director) are permaet employees of either the Victoria ad Albert Museum or of VAE Limited. A otice period for seior employees is three moths ad for the Director, six moths. Termiatio paymets are i accordace with Museum or VAE Limited s cotractual terms. 20

All permaet Museum employees (uless choosig to opt out) are members of the Civil Service pesio scheme, PCSPS, with associated redudacy ad early retiremet coditios. All VAE Limited staff are etitled to paymets as defied uder the Employmet Rights Act 1996 uless idividual cotracts defie other terms. Seior maagers remueratio disclosure (subject to audit) The Board of Trustees of the Victoria ad Albert Museum, who hold overall resposibility for the Museum, are ot remuerated. Expeses paid are disclosed i ote 5e to the Aual Report ad Accouts. The Director s ad seior maagers emolumets ad pesio details for 2007/8 are below. (The followig staff have bee icluded as they are members of the Museum s Resource Group ad hece, the key decisio makers i the orgaisatio, ad atted Trustee meetigs) Mark Joes, Director Ia Blatchford, Deputy Director David Aderso, Director of Learig ad Iterpretatio Moira Gemmill, Director of Projects, Desig ad Estate Jae Lawso, Director of Developmet Beth McKillop, Director of Collectios (From August 2007) ad Keeper of Asia Damie Whitmore, Director of Public Affairs Paul Williamso, Director of Collectios (util July 2007) ad Keeper of Sculpture, Metalwork, Ceramics ad Glass Salary, Icludig ay bous or Beefit i kid ( 000) 149,417 (142,758) 105,000 (96,035) 77,825 (77,985) 74,952 (66,833) 88,715 (84,880) Real icrease i pesio ad related lump sum at age 60 ( ) Total accrued pesio at age 60 at 31 March 2008 ad related lump sum ( ) 0-2,500 65,000-70,000 7,500-10,000 15,000-20,000 0-2,500 35,000-40,000 0-2,500 ad 2,500-5,000 51,883 0-2,500 ad 5,000-7,500 91,415 (86,299) 25,941 (75,705) 5,000-10,000 ad 15,000-20,000 Cash equivalet trasfer value at 31 March 2007 ( ) Cash equivalet trasfer value at 31 March 2008 ( ) Real icrease i CETV after adjustmet for iflatio ad chages i market ivestmet factors ( ) Employer cotributio to partership pesio accout icludig risk beefit cover ( ) 1,183,000 1,368,000 32,000 87,000 226,000 95,000 578,000 677,000 15,000 70,000 105,000 22,000 N/A * N/A * N/A * N/A * N/A * 8,872 0-2,500 ad 2,500-5,000 0-2,500 ad 0-2,500 25,000-30,000 ad 75,000-80,000 15,000-20,000 ad 55,000-60,000 25,000-30,000 ad 75,000-80,000 437,000 557,000 41,000 272,000 331,000 15,000 489,000 459,000 4,000 * Jae Lawso is ot part of the Priciple Civil Service Pesio Scheme she is employed through the Museum s tradig subsidiary V&A Eterprises Limited which operates a defied cotributio pesio scheme for its employees. NB. Prior year figures are show i brackets for Beth McKillop ad Paul Williamso the salary figures show are those for the period they served o the Resource Group oly. 21

The moetary value of beefits i kid covers ay beefits provided by the employer ad treated by the HM Reveue & Customs as a taxable emolumet. There were o beefits i kid durig the year ad there were o additioal emolumets paid other tha as disclosed above. There have bee o paymets i respect of provisio for compesatio for early termiatio for seior maagers servig i year, ad o sigificat awards i respect of early termiatio have bee made to former maagers. I additio, o compesatio was payable to former seior maagers ad o amouts were payable to third parties for services of a seior maager. Cash Equivalet Trasfer Values A Cash Equivalet Trasfer Value (CETV) is the actuarially assessed capitalised value of the pesio scheme beefits accrued by a member at a particular poit i time. The beefits value is the member s accrued beefits ad ay cotiget spouse s pesio payable from the scheme. A CETV is a paymet made by a pesio scheme or arragemet to secure pesio beefits i aother pesio scheme or arragemet whe the member leaves a scheme ad chooses to trasfer the beefits accrued i their former scheme. The pesio figures show relate to the beefits that the idividual has accrued as a cosequece of their total membership of the pesio scheme, ot just their service i a seior capacity to which the disclosure applies. The CETV figures iclude the value of ay pesio beefit i aother scheme or arragemet which the idividual has trasferred to the Civil Service pesio arragemets. They also iclude ay additioal pesio beefit accrued to the member as a result of their purchasig additioal years of pesio service i the scheme at their ow cost. CETVs are calculated withi guidelies ad framework prescribed by the Istitute ad Faculty of Actuaries. Real icrease i CETV This reflects the icrease i CETV effectively fuded by the employer. It takes accout of the icrease i accrued pesio due to iflatio, cotributios paid by the employee (icludig the value of ay beefits trasferred from aother pesio scheme or arragemet) ad uses commo market valuatio factors for the start ad ed of the period. Paul Ruddock Mark Joes Chair of Trustee Remueratio Committee Director ad Accoutig Officer 10 July 2008 10 July 2008 22

STATEMENT ON INTERNAL CONTROL Scope of resposibility As Accoutig Officer ad Chair of the Audit Committee (as represetative of the Board of Trustees), we have joit resposibility for maitaiig a soud system of iteral cotrol that supports the achievemet of the Museum s objectives whilst safeguardig public fuds ad the Museum s assets, for which the Accoutig Officer is persoally resposible, i accordace with the resposibilities assiged to him uder Govermet Accoutig. The Museum has a three-year fudig agreemet with its Govermet sposor body, the Departmet for Culture, Media ad Sport (DCMS), which icludes targets for the Museum, to assist the Departmet i meetig its Public Service Agreemet obligatios ad idetifies the most sigificat risks to achievig the Museum s objectives. Progress agaist those fudig agreemet targets is moitored at least quarterly. The purpose of the system of iteral cotrol The system of iteral cotrol is desiged to maage risk to a reasoable level cosistet with the Museum s purpose ad objectives. It is ot desiged to focus o elimiatio of risk ad the system ca, therefore, oly provide reasoable ad ot absolute assurace of effectiveess. The system s approach is a ogoig process desiged to idetify ad prioritise the risks to the achievemet of the Museum s policies, aims ad objectives; to evaluate the likelihood of those risks beig realised ad the impact should they be realised; ad to maage them efficietly, effectively ad ecoomically. The system of iteral cotrol has bee i place i the Victoria ad Albert Museum for the year eded 31 March 2008 ad up to the date of approval of the aual report ad accouts, ad accords with Treasury guidace. Capacity to hadle risk The Trustees maitai a overview of iteral cotrol issues through the Audit Committee. This Committee plays a pivotal role i esurig a soud cotrol eviromet; its members esure that a wide rage of experiece ad expertise is available to the Museum by attedig meetigs ad offerig advice whe required. Its membership ow comprises three Trustees (oe of who chairs the Committee) ad two exteral members, especially qualified for membership through their professioal experiece. The Director, Deputy Director ad Director of Fiace atted all meetigs, as do represetatives of the Natioal Audit Office, ad Iteral Audit. The Committee may hold sessios with auditors aloe or without maagemet, at ay time. The Audit Committee has approved a Risk Maagemet Policy ad reviews the Risk Register regularly. The risk ad cotrol framework Idetificatio ad assessmet of risk The Museum operates two registers: Strategic ad Operatioal The Strategic Risk Register deals with issues mostly withi the cotrol of Trustees, ad which are likely to beefit from their scrutiy. Such risks iclude goverace, reputatio ad policy matters. This strategic sectio icluded key physical threats, relatig to issues such as health ad safety ad the security of the collectios, where the Trustees have statutory or quasi-statutory obligatios or where realisatio of a risk would have exceptioally serious cosequeces (e.g. busiess cotiuity plaig). The Operatioal Risk Register deals with matters more withi the cotrol, ad persoal resposibility, of seior maagemet. This embraced a wide rage of issues such as collectios maagemet; staff recruitmet, developmet ad appraisal; fiacial maagemet ad fraud prevetio; iformatio systems security; iformatio ad data security; audiece developmet; ad procuremet. I 2006/07, Iteral Audit carried out a review of the curret process of idetificatio, maagemet, ad reportig of risks i the Museum, ad the cotet of the risk registers. As a result, the Museum chaged the format of the strategic register ad has set up a group, chaired by the Director of Fiace ad comprisig operatioal heads, which will periodically review ad update the operatioal risk register. The revised Strategic Risk Register has bee approved by the Museum s Maagemet Board ad the Board of Trustees. The ew format describes visually the overall risk ladscape ad explais that risks have several dimesios impact, likelihood ad relatioship to other risks, especially i terms of priority for maagemet time ad attetio. 23

The Audit Committee have also decided that, where a major ew risk emerges, a report should be made immediately to the Maagemet Board, rather tha waitig to report uder the ormal cycle. Moitorig of risk The procedures associated with the Risk Register are oly part of the cotrol eviromet operatig withi the Museum. Other key aspects iclude: the Maagemet Board meets fortightly to review all operatioal issues; the Trustees ad seior maagemet have agreed a Strategic Pla (2007-2012) which outlies key short ad medium-term objectives ad appropriate idicators. This esures that scarce resources are applied to key corporate priorities; the Audit Committee receives regular reports from the Iteral Auditor o the steps take to maage risks i all areas of activity; the Museum also receives reports from the Exteral Auditors (Natioal Audit Office) arisig from their as aual audit ad their value-for-moey work; the Fiace Committee reviews the fiacial maagemet of the Museum through quarterly maagemet reports ad three-year outlie budgets; the Buildigs Strategy Committee moitors the progress of large capital projects ad the performace of maagemet o health ad safety issues; the Developmet Committee assesses the feasibility of fudraisig targets (both reveue ad capital) ad door relatios; ad the Collectios Committee moitors key aspects of collectios maagemet ad major acquisitio ad loa proposals. Review of effectiveess As Accoutig Officer ad Chair of the Audit Committee (o behalf of the Board of Trustees), we have joit resposibility for reviewig the effectiveess of the cotrols. Our review of the effectiveess of the system of iteral cotrol is iformed by the work of the Iteral Auditors ad the executive maagers withi the Museum who have resposibility for the developmet ad maiteace of the iteral cotrol framework, ad by audits ad commets made by exteral auditors i their maagemet letter ad other reports. The Victoria ad Albert Museum has suffered o protected persoal data icidets durig 2007/08 or prior years ad has made o report to the Iformatio Commissioer s Office. Iteral Audit Iteral Audit services are provided by two firms of accoutats, oe providig assurace o strategic issues such as risk maagemet, ad the other o operatioal areas such as collectios maagemet. Both firms work to stadards defied i the Govermet Iteral Audit Stadards. The aual iteral audit pla is approved by the Audit Committee ad the Risk Register is used to idetify appropriate areas for ivestigatio. At regular itervals throughout the year, the Iteral Auditors provide the Accoutig Officer with reports geerated from the aual review pla ad these are the preseted to the Audit Committee. Such reports iclude the Iteral Auditor s idepedet opiio o the adequacy ad effectiveess of the Museum s system of iteral cotrol durig the report period together with recommedatios. The iteral auditors also report o progress agaist recommedatios made i previous fiacial years ad provide a aual statemet of assurace to the Accoutig Officer ad the Trustees based o the work performed durig the year. I 2007/08 the Iteral Auditors reported o key fiacial cotrols, caterig icome, buildig projects maagemet, ad collectios security. We have bee advised o the implicatios of these reviews ad a pla to address weakesses ad esure cotiuous improvemet of the system is i place. 24

Executive Maagemet Each member of the Executive Maagemet Board provides a aual assurace statemet cofirmig that all fiacial trasactios ad liabilities have bee recorded ad otified; ad also cofirmig that they will operate withi the budget resources allocated for the forthcomig fiacial year. Exteral Assurace Further assurace is provided by cosultats whom the Museum may egage from time to time to review particular areas of operatio. I additio to the year ed audit, audits carried out by other statutory bodies such as Her Majesty s Reveue ad Customs (HMRC) may provide further assurace i specific areas. Theft of Museum Objects i 2007/08 Theft of objects is oe of the Museum s major risks ad actios to mitigate this risk are beig progressively ehaced through improved security measures. The Trustees remai cocered by the seriousess of the risk of theft to the Museum ad its collectios. The Museum is also i the process of implemetig its four year pla (SecurePla), approved by the Trustees i 2004/05 ad aimed at deliverig a sigificat overhaul of gallery security o all sites. The success of SecurePla ca be evideced by the fact that the Museum suffered o thefts durig the fiacial year. A oil paitig, The Wildflower Gatherers is by Joh Liel, worth 15,000 i a frame valued at 5,000, take from the British Galleries, i March 2007, was recovered durig the year. Mark Joes Dame Marjorie Scardio Director ad Accoutig Officer Chair Audit Committee 10 July 2008 10 July 2008 25

Aex A: V&A Maagemet staff ad structure Board of Trustees at April 2008 Name Term expires Paul Ruddock (Chair) 01/11/11 Edwi Davies OBE 01/02/10 Tom Dixo OBE 01/11/10 Professor Sir Christopher Fraylig (ex officio) Betty Jackso CBE 05/12/08 Professor Lisa Jardie CBE 16/12/11 Rick Mather 30/10/08 Peter Rogers CBE 05/08/08 The Rt Ho Sir Timothy Saisbury 16/12/11 Dame Marjorie Scardio DBE 06/02/11 Samir Shah OBE 05/12/08 Committees of the Board of Trustees Committee Audit Buildigs Strategy Collectios Developmet Fiace Museum of Childhood Chairma Dame Marjorie Scardio Peter Rogers Professor Lisa Jardie Paul Ruddock Edwi Davies Professor Lisa Jardie Audit Committee at April 2008 Dame Marjorie Scardio Paul Ruddock Samir Shah OBE Joao Baptista * Robert Berg * * Not a member of the Board of Trustees V&A Maagemet Board at April 2008 Mark Joes, Director of the V&A (Chair) David Aderso, Director of Learig & Iterpretatio Ia Blatchford, Deputy Director Julius Bryat, Keeper, Word & Image Gail Durbi, Head of Olie Museum Aupam Gaguli, Director of Fiace Moira Gemmill, Director of Projects, Desig & Estate Alla Hill, Head of Huma Resources Jae Lawso, Director of Developmet Diae Lees, Director, Museum of Childhood Geoff Marsh, Director, Theatre Collectios Beth McKillop, Director of Collectios ad Keeper, Asia Jo Prosser, Maagig Director, V&A Eterprises Sue Ridley, Head of Security & Visitor Services Nick Umey, Director of Collectios Services Damie Whitmore, Director of Public Affairs Christopher Wilk, Keeper, Furiture, Textiles & Fashio Paul Williamso, Keeper, Sculpture, Metalwork, Ceramics & Glass 26

Committees of the Maagemet Board Committee Collectios Group Digital FuturePla Group Access, Iclusio & Diversity Strategy Group FuturePla Steerig Group Publicatios Advisory Group Public Programme Group Safety ad Security Committee Staffig Committee Traiig ad Developmet Advisory Group V&A UK Steerig Group Other seior staff groups Resource Group Iteratioal Strategy Group Chairma Director of Collectios Director Director of Learig & Iterpretatio Director Maagig Director, VAE Director Deputy Director Director Head of Huma Resources Director, Museum of Childhood Director Director of Collectios Orgaisatio Structure ad Decisio Makig The Natioal Heritage Act 1983 requires the Board to appoit a Director, with the approval of the Prime Miister, ad stipulates that the Director will be resposible to the Trustees for the geeral exercise of their fuctios. I geeral, the Board focuses o policy ad strategy, leavig operatioal matters to the Director. Much of the Board s busiess is coducted through its seve committees. Key decisios/issues reserved to the Board iclude: issues of corporate strategy key strategic objectives ad targets major decisios ivolvig the use of fiacial ad other resources seior persoel issues ad stadards of coduct the appoitmet of the Director (joitly with the Prime Miister) ivolvemet i the appoitmet of some seior staff (joitly with the Director) the approval of major purchases by the Museum of objects valued at 100,000, or more, o the recommedatio of the Trustees Collectios Committee the approval of major loas by the Museum of objects valued at 1,000,000, or more, o the recommedatio of the Trustees Collectios Committee cosiderig the remueratio of seior staff. The primary decisio-makig body of the V&A is the Maagemet Board, comprisig 18 seior staff members ad chaired by the Director. 27

Aex B: Orgaisatioal structure The diagram shows the V&A s maagemet structure at April 2008 Mark Joes Director Directorate Damie Whitmore Director of Public Affairs Beth McKillop Director of Collectios ad Keeper, Asia Departmet Jo Prosser Maagig Director V&E Eterprises Nick Umey Director of Collectios Services Diae Lees Director of V&A Museum of Childhood Divisioal Structure Corporate Commuicatios Marketig Julius Bryat Keeper of Word & Image Christopher Wilk Keeper of Furiture, Textile & Fashio Paul Williamso Keeper of Sculpture, Metalwork, Ceramics & Glass Divisioal Structure V&A Publishig V&A Retail V&A Licesig Corporate Evets V&A Images VAE Fiace Divisioal Structure Exhibitios Coservatio Photographic Services Records & Collectios Services Asia (Keeper also Director of Collectios) Carolie Sargetso Research David Aderso Director of Learig & Iterpretatio Divisioal Structure Diversity Strategy Gallery Iterpretatio Learig Services L&I Admiistratio Sackler Cetre Moira Gemmill Director of Projects, Desig & Estate Divisioal Structure Major Projects Desig Estate Maagemet 28 Ia Blatchford Deputy Director Alla Hill Head of Huma Resources Aupam Gaguli Direcctor of Fiace Sue Ridley Head of Security & Visitor Services Structure Huma Resources Traiig & Developmet Welfare Structure Fiace Procuremet Structure Security Visitor Services Health & Safety Jae Lawso Director of Developmet Key policy areas Strategegic plaig Goverace DCMS relatios Safety & Security Employee relatios V&A UK Strategy V&A maagemet structure at April 2008 Key policy areas Visitor experiece V&A brad Culture Pla Media relatios Public Programme Key policy areas Collectios Strategy, expertise & kowledge Iteratioal Strategy Key policy areas Itellectual ageda Diversity Cultural Policy Exhibitio Road Strategic parterships Key policy areas FuturePla Desig Estate Key policy areas Fudraisig Heritage Lottery Fud Geoffery Marsh Director of V&A Theatre Collectios Divisioal Structure Grats Major Gifts Developmet Research Plaed Givig Membership Museum Evets Gail Durbi Head of Olie Museum Sarah Wimill Head of Iformatio Systems Services Structure Olie Museum Structure Iformatio Systems Services

Aex C: Legal ad admiistrative iformatio Trustees Paul Ruddock (Chair) Edwi Davies OBE Tom Dixo OBE Professor Sir Christopher Fraylig (ex officio) Betty Jackso CBE Professor Lisa Jardie CBE Rick Mather Peter Rogers CBE The Rt Ho Sir Timothy Saisbury Dame Marjorie Scardio DBE Samir Shah OBE Director Mark Joes Pricipal address Victoria ad Albert Museum Cromwell Road Lodo SW7 2RL Solicitors Farrer & Co 66 Licol s I Fields Lodo WC2A 3CH Bakers Ivestmet Maagers Natioal Westmister Sarasi Chiswell Kightsbridge Busiess Cetre 5th floor 186 Brompto Road Juxo House Lodo SW3 1XJ 100 St Paul s Churchyard Lodo, EC4M 8BU Auditors Iteral Auditors Exteral AHL Limited Comptroller ad Auditor Geeral Chartwell House Natioal Audit Office 292-294 Hale Lae 157-197 Buckigham Palace Road Edgware Lodo SW1W 9SP Middlesex HA8 8NP Heather Trust for the Arts Sayer Vicet Saffery Champess 8 Agel Gate Lio House City Road Red Lio Street Lodo EC1V 2SJ Lodo WC1R 4GB V&A Eterprises Limited Moore Stephes LLP St Paul s House Lodo EC4M 7BP V&A Limited Haysmacityre Fairfax House, 15 Fulwood Place, Lodo WC1V 6AY 29

STATEMENT OF TRUSTEES AND DIRECTOR S RESPONSIBILITIES The Board of Trustees of the V&A was established by the Natioal Heritage Act 1983. The fuctios of the Board, as defied by the Natioal Heritage Act are: to care for, preserve ad add to the collectios; to esure that the collectios are made available by display ad by providig referece facilities; to add to the body of kowledge relevat to the collectios through research; ad to dissemiate that kowledge. Uder ss.9(4) ad (5) of the Museums ad Galleries Act 1992, the Board of Trustees is required to prepare a statemet of accouts for each fiacial year i the form ad o the basis determied by the Secretary of State for the Departmet for Culture, Media ad Sport with the coset of the Treasury. The accouts are prepared to show a true ad fair view of the Museum s fiacial activities durig the year ad of its fiacial positio at the ed of the year. The Accoutig Officer has take the ecessary steps to esure that that there is o relevat audit iformatio of which the exteral auditors are uaware. I preparig the accouts the Trustees are required to: observe the accouts directio issued by the Secretary of State*, icludig the relevat accoutig ad disclosure requiremets, ad apply suitable accoutig policies o a cosistet basis; make judgemets ad estimates that are reasoable ad prudet; state whether applicable accoutig stadards ad statemets of recommeded practice have bee followed, ad disclose ad explai ay material departures i the fiacial statemets; ad prepare the fiacial statemets o the goig cocer basis uless it is iappropriate to assume that the Museum will cotiue i operatio. The Accoutig Officer for the Departmet for Culture, Media ad Sport has desigated the Director as the Accoutig Officer for the Museum. His relevat resposibilities as Accoutig Officer, icludig his resposibility for the propriety ad regularity of the public fiaces for which he is aswerable, ad for the keepig of proper records, are set out i the No-Departmetal Public Bodies Accoutig Officer Memoradum issued by HM Treasury ad published i Govermet Accoutig. MARK JONES PAUL RUDDOCK Director ad Accoutig Officer Chairma of Trustees 10 July 2008 10 July 2008 * (a copy of which is available from the Fiace Director, Victoria & Albert Museum, Cromwell Road, Lodo SW7 2RL) 30

The Certificate ad Report of the Comptroller ad Auditor Geeral to the Houses of Parliamet I certify that I have audited the fiacial statemets of the Victoria ad Albert Museum group for the year eded 31 March 2008 uder the Museums ad Galleries Act 1992. These comprise the Cosolidated Statemet of Fiacial Activities, the Cosolidated ad Museum Balace Sheets, the Cosolidated Cash Flow Statemet ad the related otes. These fiacial statemets have bee prepared uder the accoutig policies set out withi them. I have also audited the iformatio i the Remueratio Report that is described i that report as havig bee audited. Respective resposibilities of the Board of Trustees, the Director ad auditor The Board of Trustees ad the Director, as Accoutig Officer, are resposible for preparig the Aual Report, which icludes the Remueratio Report, ad the fiacial statemets i accordace with the Museums ad Galleries Act 1992 ad directios made thereuder by the Secretary of State for Culture, Media ad Sport with the coset of the Treasury, ad for esurig the regularity of fiacial trasactios. These resposibilities are set out i the Statemet of Trustees ad Director s Resposibilities. My resposibility is to audit the fiacial statemets ad the part of the Remueratio Report to be audited i accordace with relevat legal ad regulatory requiremets, ad with Iteratioal Stadards o Auditig (UK ad Irelad). I report to you my opiio as to whether the fiacial statemets give a true ad fair view ad whether the fiacial statemets ad the part of the Remueratio Report to be audited have bee properly prepared i accordace with the Museums ad Galleries Act 1992 ad directios made thereuder by the Secretary of State for Culture, Media ad Sport with the coset of the Treasury. I report to you whether, i my opiio, the iformatio, which comprises the Itroductio; Collectios ad Visitors; Exhibitios ad Cotemporary; Educatio, Learig ad Iterpretatio ad the Fiacial Review, icluded i the Aual Report, is cosistet with the fiacial statemets. I also report whether i all material respects the icomig ad outgoig resources fuded by Parliamet have bee applied to the purposes iteded by Parliamet ad the fiacial trasactios coform to the authorities which gover them. I additio, I report to you if the Victoria ad Albert Museum has ot kept proper accoutig records, if I have ot received all the iformatio ad explaatios I require for my audit, or if iformatio specified by relevat authorities regardig remueratio ad other trasactios is ot disclosed. I review whether the Statemet o Iteral cotrol reflects the Victoria ad Albert Museum s compliace with HM Treasury s guidace, ad I report if it does ot. I am ot required to cosider whether this statemet covers all risks ad cotrols, or form a opiio o the effectiveess of the Victoria ad Albert Museum s corporate goverace procedures or its risk ad cotrol procedures. I read the other iformatio cotaied i the Aual Report ad cosider whether it is cosistet with the audited fiacial statemets. This other iformatio comprises the Aexes ad the uaudited part of the Remueratio Report. I cosider the implicatios for my report if I become aware of ay apparet misstatemets or material icosistecies with the fiacial statemets. My resposibilities do ot exted to ay other iformatio. Basis of audit opiios I coducted my audit i accordace with Iteratioal Stadards o Auditig (UK ad Irelad) issued by the Auditig Practices Board. My audit icludes examiatio, o a test basis, of evidece relevat to the amouts, disclosures ad regularity of fiacial trasactios icluded i the fiacial statemets ad the part of the Remueratio Report to be audited. It also icludes a assessmet of the sigificat estimates ad judgmets made by the Board of Trustees ad the Director i the preparatio of the fiacial statemets, ad of whether the accoutig policies are most appropriate to the Victoria ad Albert Museum s circumstaces, cosistetly applied ad adequately disclosed. I plaed ad performed my audit so as to obtai all the iformatio ad explaatios which I cosidered ecessary i order to provide me with sufficiet evidece to give reasoable assurace that the fiacial statemets ad the part of the Remueratio Report to be audited are free from material misstatemet, whether caused by fraud or error, ad that i all material respects the icomig ad outgoig resources fuded by Parliamet have bee applied to the purposes iteded by Parliamet ad the fiacial trasactios coform to the authorities which gover them. I formig my opiio I also evaluated the overall adequacy of the presetatio of iformatio i the fiacial statemets ad the part of the Remueratio Report to be audited. 31

Opiios I my opiio: the fiacial statemets give a true ad fair view, i accordace with the Museums ad Galleries Act 1992 ad directios made thereuder by the Secretary of State for Culture, Media ad Sport with the coset of the Treasury, of the state of the Victoria ad Albert Museum ad the group s affairs as at 31 March 2008 ad of its icomig resources ad applicatio of resources of the group for the year the eded; the fiacial statemets ad the part of the Remueratio Report to be audited have bee properly prepared i accordace with the Museums ad Galleries Act 1992 ad directios made thereuder by the Secretary of State for Culture, Media ad Sport with the coset of the Treasury; ad the iformatio, which comprises the Itroductio; Collectios ad Visitors; Exhibitios ad Cotemporary; Educatio, Learig ad Iterpretatio ad the Fiacial Review, icluded i the Aual Report, is cosistet with the fiacial statemets. Opiio o Regularity I my opiio, i all material respects, icomig ad outgoig resources fuded by Parliamet have bee applied to the purposes iteded by Parliamet ad the fiacial trasactios coform to the authorities which gover them. Report I have o observatios to make o these fiacial statemets. T J Burr Natioal Audit Office Comptroller ad Auditor Geeral 151 Buckigham Palace Road Victoria 16 July 2008 Lodo SWIW 9SS 32

Cosolidated Statemet of Fiacial Activities for the year eded 31 March 2008 Notes Urestricted Restricted Permaet 2008 2007 fuds fuds Edowmet Total Total fuds fuds fuds 000 000 000 000 000 Icomig resources Icomig resources from geerated fuds Volutary Icome Grat i Aid 2a 38,527 3,735 42,262 39,112 Doatios, legacies ad similar icome 2b 1,115 11,416 10,716 23,247 11,558 Doated objects 6 3,185 3,185 1,086 Activities for geeratig fuds Tradig Icome 8 10,713 10,713 9,489 Sposorship 175 119 294 1,069 Ivestmet icome 3 624 718 1,342 1,000 51,154 19,173 10,716 81,043 63,314 Icomig resources from charitable activities Lottery icome 2,229 2,229 3,564 Admissios & exhibitio fees (icl loas & tourig) 2,721 10 2,731 2,909 2,721 2,239 4,960 6,473 Other Icomig resources Other icome 1,085 566 1,651 4,222 Exceptioal item icome 200 1,085 566 1,651 4,422 Total icomig resources 54,960 21,978 10,716 87,654 74,209 Resources expeded 5(a) Cost of geeratig fuds Costs of geeratig volutary icome 3,125 57 3,182 3,132 Fudraisig Tradig costs 8 8,730 8,730 7,788 Ivestmet maagemet costs 55 31 86 36 11,910 88 11,998 10,956 Charitable Activities Collectios & Visitors 33,753 2,643 36,396 36,403 Exhibitios & Cotemporary 6,208 165 6,373 6,504 Educatio, Learig & iterpretatio 5,741 1,343 7,084 6,516 45,702 4,151 49,853 49,423 Goverace costs 740 28 768 780 740 28 768 780 Total resources expeded 58,352 4,267 62,619 61,159 Net (outgoig)/icomig resources before otioal costs (3,392) 17,711 10,716 25,035 13,050 33

Cosolidated Statemet of Fiacial Activities for the year eded 31 March 2008 (cot d) Notes Urestricted Restricted Permaet 2008 2007 fuds fuds Edowmet Total Total fuds fuds fuds 000 000 000 000 000 Notioal Costs (67) (9,643) (9,710) (9,566) Net resources expeded icludig otioal costs (3,459) 8,068 10,716 15,325 3,484 Reversal of otioal costs 67 9,643 9,710 9,566 Net (outgoig)/icomig resources before trasfers (3,392) 17,711 10,716 25,035 13,050 Gross trasfers betwee fuds 5,326 (5,326) Net icomig resources before other recogised gais ad losses 1,934 12,385 10,716 25,035 13,050 Gais/(losses) o ivestmet assets 163 64 (164) 63 148 Gai o revaluatio of fixed assets 8,883 8,883 11,875 Net movemet i fuds 2,097 21,332 10,552 33,981 25,073 Fud balaces bfwd at 1 April 2007 7,817 373,314 5,003 386,134 361,061 Fud balaces cfwd at 31 March 2008 14 9,914 394,646 15,555 420,115 386,134 All operatios of the Museum cotiued throughout both periods ad o operatios were acquired or discotiued i either period. There are o recogised gais or losses other tha those show above. The otes o pages 37 to 53 form part of these fiacial statemets.. 34

Cosolidated ad Museum Balace Sheets for the year eded 31 March 2008 Group Museum Group Museum Notes 2008 2008 2007 2007 000 000 000 000 Fixed assets Tagible assets 6 346,013 345,829 332,484 332,175 Heritage assets 6 34,765 34,765 30,801 30,801 Ivestmets 7 25,240 15,886 10,876 11,079 406,018 396,480 374,161 374,055 Debtors due after oe year 9 1,000 Curret assets Stock 1,044 1,071 Debtors due withi oe year 9 6,841 8,646 7,041 8,512 Cash 17,993 15,271 14,870 13,816 25,878 23,917 22,982 22,328 Creditors due withi oe year 10 (11,642) (10,792) (10,822) (10,062) Net curret assets 14,236 13,125 12,160 12,266 Total assets less curret liabilities 420,254 410,605 386,321 386,321 Creditors due after oe year 10 (139) (139) (187) (187) Net assets 420,115 410,466 386,134 386,134 Icome fuds Desigated fuds 8,744 8,744 6,817 6,817 Geeral fuds 1,170 1,170 1,000 1,000 Urestricted fuds 14 9,914 9,914 7,817 7,817 Restricted fuds 14 394,646 394,554 373,314 373,314 Total Icome fuds 404,560 404,468 381,131 381,131 Permaet edowmet fuds 14 15,555 5,998 5,003 5,003 Total fuds 420,115 410,466 386,134 386,134 The fiacial statemets o pages 33 to 53 were approved by the Director ad the Chairma. MARK JONES PAUL RUDDOCK Director ad Accoutig Officer Chairma of Trustees 10 July 2008 10 July 2008 The fiacial statemets were despatched to the secretary for the Departmet for Culture Media ad Sport o 16 July 2008 The otes o pages 37 to 53 form part of these fiacial statemets. 35

Cosolidated Cashflow Statemet for the year eded 31 March 2008 2008 2007 000 000 Net cash iflow from operatig activities a 19,102 19,750 Returs o ivestmets b 1,342 1,000 Capital expediture ad fiacial ivestmet b (28,037) (18,198) Permaet Edowmet b 10,716 500 Icrease i cash ad cash equivalets d 3,123 3,052 a) Recociliatio of et icomig resources to et cash iflow from operatig activities Net icomig resources (Urestricted ad Restricted Fuds) 14,319 12,550 Ivestmet icome (1,342) (1,000) Net icomig resources before trasfer ad revaluatios 12,977 11,550 Doated assets acquired (3,185) (1,086) Depreciatio 8,302 8,138 Loss o fixed assets 10 (Icrease)/decrease i stocks 27 (99) Decrease/(icrease) i debtors 201 608 (Decrease)/Icrease i creditors due withi oe year 818 775 (Decrease)/Icrease i creditors due after oe year (48) (136) Net cash iflow from operatig activities 19,102 19,750 b) Aalysis of cash flows Retur o ivestmets: Ivestmet icome 1,342 1,000 Capital expediture ad fiacial ivestmet: Paymets to acquire tagible fixed assets (13,737) (13,892) Purchase of ivestmets (19,119) (11,586) Proceeds from sale of ivestmets 4,563 7,280 Chages i market values ad exchage rate effects 256 (28,037) (18,198) Fiacig: (Decrease)/icrease i Permaet Edowmets 10,716 500 c) Recociliatio of et cash flow to movemet i et fuds Icrease i cash i the period 3,123 3,052 Cashflow from chage i liquid resources Movemet i et fuds i the period 3,123 3,052 Net fuds at 1 April 2007 14,870 11,818 Net fuds at 31 March 2008 17,993 14,870 d) Aalysis of et fuds At 1 April Cashflow At 31 2007 March 2008 000 000 000 Cash at bak ad i had 14,870 3,123 17,993 Liquid resources Net fuds 14,870 3,123 17,993 The otes o pages 37 to 53 form part of these fiacial statemets. 36

Notes to the Cosolidated Fiacial Statemets for the year eded 31 March 2008 1 Accoutig policies a) Basis of Accoutig The fiacial statemets have bee prepared uder the historical cost covetio, as modified by the revaluatio of certai fixed assets ad with the exceptio of ivestmets which have bee icluded at market value, ad comply with Statemet of Recommeded Practice Accoutig ad Reportig by Charities, applicable accoutig stadards, the requiremets of the Compaies Act ad the Accouts Directio issued by the Departmet for Culture, Media & Sport i 2005 ad i a form directed by the Secretary of State with the coset of Treasury i accordace with the Museums ad Galleries Act 1992. The Museum is exempt from corporatio tax uder sectio 505 of the Icome ad Corporatio Taxes Act 1998. Cosolidated accouts have bee prepared which iclude the Museum accouts, the Museum s tradig subsidiaries V&A Eterprises Ltd., ad V&A Limited, cosolidated o a lie-by-lie basis. I additio the cosolidated accouts also iclude those of the Heather Trust for the Arts as the V&A has a cotrollig ifluece over the board of the Trust. The Museum Trustees act as Trustees to all the idividual fuds withi the Museum accouts apart from the Lodo Archives of the Dace for which the Director is a Trustee alog with two o-museum Trustees. The Museum ows the whole of the issued share capital of V&A Eterprises Ltd ad exercises further cotrol through its overall majority votig powers by virtue of the fact that two of the Museum s Trustees as well as the Museum Director are directors of the compay. The Frieds of the V&A is a separate charitable compay, ru by its ow board of Trustees ad is ot cosolidated ito the Museum s accouts. b) Fud accoutig Geeral fuds are available for use at the discretio of the Trustees i furtherace of the geeral objectives of the Museum. Desigated fuds comprise urestricted fuds which have bee set aside at the discretio of the Trustees for specific purposes. Restricted fuds are fuds subject to specific restrictios imposed by doors or by the purpose of the appeal. Permaet edowmet fuds are fuds which the door has stated are to be held as capital. The South Kesigto, Bethal Gree ad Blythe House sites are subject to restrictios o their disposal. As a result a trasfer is made each year from Urestricted to Restricted fuds i respect of the govermet fuded portio of capital movemets i the year. c) Icomig resources Grat-i-Aid icome from the Departmet for Culture, Media ad Sport is recogised i the Statemet of Fiacial Activities o receipt. The restricted elemet relates to those fuds grated specifically for capital purchases. Gifts ad doated assets are accouted for whe received by the Museum, ad are valued at their market value o the date of receipt. Legacies are recogised as receivable whe cofirmatio is received from the estate s executor. Grats ad other icome that is awarded subject to specific performace coditios, icludig scietific grats ad icome from the Heritage Lottery Fud, are recogised whe the performace coditios for their receipt have bee met ad, where appropriate, icome is deferred accordigly. The museum recogises the costs ad icome of a exhibitio i the year i which the exhibitio takes place. Icome received for a exhibitio takig place i a future period is etered i the first istace o the balace sheet ad disclosed uder the headig Deferred exhibitio icome. This deferred icome relatig to the exhibitio, together with ay deferred expeses are recogised i the SOFA i the year i which the majority of the exhibitio takes place. All other icome is accouted for o a receivable basis. d) Expediture Expediture is classified uder the pricipal categories of Charitable Activities ad Costs of Geeratig Fuds rather tha by type of expese, i order to provide more useful iformatio to the users of the fiacial statemets. These categories comprise direct expediture icludig direct staff costs attributable to the activity. Costs are allocated directly to the activities to which they relate. Fiace, Huma Resources, Iformatio Services & Support ad Estate costs are allocated betwee the activities o the basis of staff umbers withi these areas. 37

38 Goverace costs comprise the costs associated with the strategic maagemet of the Museum. Goverace staff costs represet the staff ivolved i the strategic maagemet of the Museum. Also icluded withi Goverace costs are the costs of supportig these staff together with other strategic costs such as exteral audit costs, iteral audit costs, legal fees ad cosultacy fees. The museum recogises the costs ad icome of a exhibitio i the year i which the exhibitio takes place. The costs of a exhibitio takig place i a future period are charged i the first istace to the balace sheet ad disclosed uder the headig Prepaid exhibitios expediture. These costs, together with ay deferred icome relatig to the exhibitio, are recogised i the SOFA i the year i which the majority of the exhibitio takes place. Depreciatio has bee allocated to activities o a basis cosistet with the use of assets ad is charged based upo opeig asset values. All other liabilities are recogised as they fall due. e) Notioal cost of capital Notioal cost of capital calculatio is a requiremet of Treasury ad is calculated as 3.5% (2007: 3.5%) of the average o-doated capital employed by the Museum i the year. f) Heritage assets I accordace with the Fiacial Reportig Maual (FReM) as issued by the Treasury, additios to the collectio acquired sice 1st April 2001 are capitalised ad recogised i the Balace Sheet at the cost or value of the acquisitio, where such a cost or valuatio is reasoably obtaiable. Such items are ot depreciated or revalued as a matter of routie. g) Tagible fixed assets Tagible fixed assets are accouted for usig modified historic cost accoutig where the effect is material. Assets with a value greater tha 2,000 are capitalised ad icluded i the balace sheet. I accordace with FRS15 Tagible Fixed Assets, additios to the Collectio acquired sice 1 April 2001 are capitalised at the cost or value of the acquisitio, ad are ot depreciated. Depreciatio has bee provided o all opeig gross book values of tagible assets except lad, calculated to write off the cost, less estimated residual value, of each asset evely over its expected useful life, as follows: Buildigs Structural betwee 20 ad 50 years Buildigs Fit-out betwee 4 ad 20 years Buildigs Plat & Machiery betwee 4 ad 20 years Furiture ad Fittigs betwee 4 ad 20 years Equipmet betwee 4 ad 10 years For assets uder costructio, depreciatio is ot charged util the year the asset has bee completed. A full year of depreciatio is charged i the year of acquisitio, ad oe i the year of disposal. As stated above, acquisitios to the collectio are ot depreciated or revalued as a matter of routie. h) Ivestmets Ivestmets are stated at market value. It is the Museum s policy to keep valuatios up to date such that whe ivestmets are sold there is o gai or loss arisig. As a result the Statemet of Fiacial Activities icludes oly those urealised gais arisig from the revaluatio of the ivestmet portfolio throughout the year. Disclosure is made i ote 7 of the differece betwee the historical cost ad the sale proceeds of the ivestmets sold durig the year. i) Stock ad work i progress Stock is valued at the lower of cost ad et realisable value ad comprises goods for resale. j) Pesio cost Past ad preset employees are covered by the provisios of the Pricipal Civil Service Pesio Scheme which are described i the Remueratio Report. The defied beefit elemets of the schemes are ufuded ad are o-cotributory except i respect of depedets beefits. The Museum recogises the expected cost of these elemets o a systematic ad ratioal basis over the period durig which it beefits from employees services by paymet to the Pricipal Civil Service Pesio Scheme (PCSPS) of amouts calculated o a accruig basis. Liability for paymet of future beefits is a charge o the PCSPS. I respect of the defied cotributio elemets of the schemes, the Museum recogises the cotributios payable for the year.

V & A Eterprises Limited operates a defied cotributio pesio scheme ad the assets of the scheme are held separately from those of the compay i a idepedetly admiistered fud with Frieds Providet. k) Operatig leases Retals applicable to operatig leases are charged to the Statemet of Fiacial Activities over the period i which the cost is icurred. l) Foreig currecies Trasactios i foreig currecies are recorded at the rate rulig at the date of the trasactio. Moetary assets ad liabilities are retraslated at the rate of exchage rulig at the balace sheet date. All differeces are take to the Statemet of Fiacial Activities. 2a Grat i Aid icome Grat i Aid of 42.26m was received from the Departmet for Culture, Media ad Sport durig the year (2006/07 39.11m). This represets 54% of the total icome for the Museum (excl. the Heather Trust for the Arts Edowmet). The balace of fudig, icludig the majority of capital improvemets, comes from self-geerated icome. Icluded withi the total Grat i Aid received is a amout restricted to capital works which for 2007/08 totalled 3.25m (2006/07 1.75m). 2b Volutary icome Urestricted Restricted Permaet Total Total fuds fuds Edowmet 2008 2007 Fuds 000 000 000 000 000 Doatios ad Legacies 679 11,416 10,716 22,811 11,183 Corporate Members 216 216 201 Patros scheme 220 220 174 3 Ivestmet Icome 1,115 11,416 10,716 23,247 11,558 Iterest receivable 463 158 621 777 British Govermet stocks 52 252 304 22 UK equities 81 230 311 132 Overseas equities 28 80 108 91 Exchage gais/(losses) (2) (2) (22) 4 Net icomig resources: is stated after chargig: 624 718 1,342 1,000 2008 2007 000 000 Exteral Auditors remueratio (Group) 56 50 Operatig lease paymets Lad ad Buildigs 659 575 Other 150 243 39

5a Total resources expeded Staff Costs Other Costs Depreciatio Total Total 2008 2007 000 000 000 000 000 Cost of geeratig fuds Costs of geeratig volutary icome 1,797 1,135 250 3,182 3,132 Fudraisig Tradig costs 2,723 5,846 161 8,730 7,788 Ivestmet maagemet costs 86 86 36 4,520 7,067 411 11,998 10,956 Charitable Activities Collectios & Visitors 18,695 10,921 6,780 36,396 36,403 Exhibitios & Cotemporary 1,611 4,516 245 6,372 6,504 Educatio, Learig & iterpretatio 4,328 2,026 731 7,085 6,516 24,634 17,463 7,756 49,853 49,423 Goverace costs 1 387 246 135 768 780 Total resources expeded 29,541 24,776 8,302 62,619 61,159 1 Goverace Costs Exteral Audit Fees * 37 35 Iteral Audit Fees 47 50 Legal Fees 44 20 Staff costs 387 371 Cosultacy Fees 11 40 Other strategic costs 107 130 Depreciatio 135 134 768 780 * Museum oly Support costs icluded i above resources expeded have bee allocated i the activities above o the basis of staff umbers as follows: Brach Iformatio Fiace & Museums services & Projects & Admiis- Huma Admiissupport Estates tratio Resources tratio Total 000 000 000 000 000 000 Cost of geeratig fuds Costs of geeratig volutary icome 48 201 38 26 46 359 Charitable Activities Collectios & Visitors 1,420 5,983 1,138 786 1,377 10,704 Exhibitios & Cotemporary 82 344 65 45 79 615 Educatio, Learig & iterpretatio 423 1,782 339 235 411 3,190 1,925 8,109 1,542 1,066 1,867 14,509 1,973 8,310 1,580 1,092 1,913 14,868 40 5b Wages ad salaries 2008 2007 000 000 Wages ad salaries 22,726 21,809 Social security costs 1,746 1,679 Pesio costs 3,882 3,784 Agecy ad temporary staff 1,023 992 29,377 28,264 Early retiremet ad severace costs 164 29,541 28,264

Durig the year exteral fudig was received i respect of salaries totallig 1,269,614 (2007: 787,113). V&A Eterprises Limited s staff costs were 3.764m (2007: 3.574m) of which 2.723m (2007: 2.593m) was for tradig activities ad 1.041m (2007: 0.982m) was for services provided to the museum. The umber of employees, icludig the Director, whose emolumets as defied for taxatio purposes amouted to over 60,000 i the year was as follows: 2008 2007 60,001 70,000 8 7 70,001 80,000 9 6 80,001 90,000 2 2 90,001 100,000 1 1 100,001 110,000 1 140,001 150,000 1 1 22 17 Of the employees listed above, 19 (2007: 15) are members of the Pricipal Civil Service Pesio Scheme, ad the total pesio cotributios payable i the year for these employees was 335,731 (2007: 290,921). The other 3 (2007: 2) employees are members of the V&A Eterprises Limited defied cotributio scheme, ad the total pesio cotributios payable i the year for these employees was 22,872 (2007: 15,666). Seior staff salaries are disclosed i further detail i the remueratio report. 5c Pesio disclosure The Pricipal Civil Service Pesio Scheme (PCSPS) is a ufuded multi-employer defied beefit scheme. The Victoria ad Albert Museum is uable to idetify its share of the uderlyig liabilities. A full actuarial valuatio was carried out by Hewitt Associates as at 31 March 2007. Details ca be foud i the resource accouts of the Cabiet Office: Civil Superauatio (www.civilservice-pesios.gov.uk). The Victoria ad Albert Museum is oly liable for the cotributio they have made directly. For 2007-08, employers cotributios of 3.652m were payable to the PCSPS (2006-07 3.555m) at oe of four rates i the rage 17.1 to 25.5 percet of pesioable pay, based o salary bads (the rates i 2006-07 were betwee 17.1 ad 25.5%). The scheme s Actuary reviews employer cotributios every four years followig a full scheme valuatio. From 2007-08, the salary bads will be revised but the rates will remai the same. The cotributio rates reflect beefits as they are accrued, ot whe the costs are actually icurred, ad reflect past experiece of the scheme. From 1 October 2002, museum staff may be i oe of three statutory based fial salary defied beefit schemes (classic, premium, ad classic plus). The Schemes are ufuded with the cost of beefits met by moies voted by Parliamet each year. Pesios payable uder classic, premium, ad classic plus are icreased aually i lie with chages i the Retail Prices Idex. Employee cotributios are set at the rate of 1.5% of pesioable earigs for classic ad 3.5% for premium ad classic plus. Beefits i classic accrue at the rate of 1/80th of pesioable salary for each year of service. I additio, a lump sum equivalet to three years pesio is payable o retiremet. For premium, beefits accrue at the rate of 1/60th of fial pesioable earigs for each year of service. Ulike classic, there is o automatic lump sum (but members may give up (commute) some of their pesio to provide a lump sum). Classic plus is essetially a variatio of premium, but with beefits i respect of service before 1 October 2002 calculated broadly as per classic. Employees joiig after 1 October 2002 could opt to ope a partership pesio accout, a stakeholder pesio with a employer cotributio. Employers cotributios of 33,628 were paid to oe or more of a pael of four appoited stakeholder pesio providers. Employer s cotributios are age-related ad rage from 3 to 12.5 per cet of pesioable pay. Employers also match employee cotributios up to 3 per cet of pesioable pay. Cotributios due to the partership pesio providers at the balace sheet date were il. Cotributios prepaid at the date were il. The Museum s tradig compay, V&A Eterprises Limited, operates a defied cotributio pesio scheme. The assets of the scheme are held separately from those of the compay i a idepedetly admiistered fud with Frieds Providet. Employer cotributios are made at a average of 10% ad the total amout paid durig the year was 211,090 (2007: 211,372). 41

5d Trustees The Trustees either received or waived ay emolumets durig the year (2007: il). Travel expeses reimbursed to oe trustee amouted to 1,704 (2007: Oe trustee 2,226) 5e Average umber of employees (*) 2008 2007 Costs of geeratig volutary icome 46 46 Fudraisig Tradig costs 107 101 Collectios & Visitors 608 600 Exhibitios & Cotemporary 35 32 Educatio, Learig & iterpretatio 181 168 Goverace costs 10 13 987 960 (*) based o full-time equivalets. Of the above employees 680 are full time permaet employees of the Museum (2007: 667), 43 are exterally fuded posts (2007: 28), ad the remaiig employees are temporary staff. 6 Tagible fixed assets Assets i Lad & Furiture course of Buildigs & fittigs Equipmet costructio Total Group 000 000 000 000 000 Cost or valuatio At 1 April 2007 325,017 1,918 4,250 7,122 338,307 Re-classificatio 101 (101) Additios 2,226 379 500 9,853 12,958 Disposals (259) (315) (574) Revaluatio 1,751 1,751 At 31 March 2008 329,095 2,038 4,435 16,874 352,443 Depreciatio At 1 April 2007 1,386 1,350 3,087 5,823 Re-classificatio Charged for the year 7,187 407 708 8,302 Disposals (250) (313) (563) Revaluatio (7,132) (7,132) At 31 March 2008 1,441 1,507 3,482 6,430 Net book value At 31 March 2008 327,654 531 954 16,874 346,013 At 31 March 2007 323,631 568 1,163 7,122 332,484 42

The et book value at 31 March 2008 represets fixed assets of the Group for: Assets i Lad & Furiture course of Buildigs & fittigs Equipmet costructio Total 000 000 000 000 000 Direct charitable activities 276,430 59 462 474 277,425 Other activities 51,224 472 492 16,400 68,588 Total 327,654 531 954 16,874 346,013 Assets i Lad & Furiture course of Buildigs & fittigs Equipmet costructio Total Museum 000 000 000 000 000 Cost or valuatio At 1 April 2007 325,017 1,431 4,025 7,122 337,595 Re-classificatio 101 (101) Additios 2,226 350 493 9,853 12,922 Disposals (47) (306) (353) Revaluatio 1,751 1,751 At 31 March 2008 329,095 1,734 4,212 16,874 351,915 Depreciatio At 1 April 2007 1,386 1,073 2,960 5,419 Re-classificatio Charged for the year 7,187 303 650 8,140 Disposals (38) (305) (343) Revaluatio (7,132) (7,132) At 31 March 2008 1,441 1,338 3,305 6,084 Net book value At 31 March 2008 327,654 396 907 16,874 345,829 At 31 March 2007 323,631 358 1,065 7,122 332,176 Heritage Assets Additios of 3.964m (2007: 2.748m) were made to the Collectio. There were o disposals durig the year. The additios comprise the followig elemets: 2008 2007 000 000 Opeig balace b/fwd 30,801 28,053 Doatios of objects by gift or bequest 2,959 543 Doatios of objects uder the acceptace i lieu scheme 226 543 3,185 1,086 Acquisitios fuded from urestricted fuds 408 436 Acquisitios fuded by specific grats ad doatios (restricted fuds) 371 1,226 Total Additios 3,964 2,748 Closig balace c/fwd 34,765 30,801 Lad & Buildigs O the 31st March 2008 a desktop valuatio was carried out by Gerald Eve (Chartered Surveyors) i accordace with the RICS appraisal ad valuatios maual. The last full valuatio was carried out o 31st March 2004. The site at South Kesigto was valued at 323.9m, the site at Bethal Gree at 13.0m ad the V&A s share of Blythe House at 7.3m. The et revaluatio surplus arisig of 8.0m o the site at South Kesigto, of 0.8m o the site at Bethal Gree ad of 0.2m o the site at Blythe House were trasferred to Revaluatio Reserve. I additio, the followig leasehold properties (all of which are operatig leases) were also subject to a desktop valuatio by Gerald Eve (Chartered Surveyors) as at 31 March 2008. The Valuatio amouts are: 43

Leasehold Property Property Title Basis of Valuatio 2008 2007 000 000 Museum of Performace, WC2 Leasehold Existig Use Value 100 88 Kirtlig Street, SW8 Leasehold Existig Use Value 200 252 Vaults 3, 4, 5 & 6 Dea Hill Park Leasehold Existig Use Value The valuatio of leaseholds reflects ay differeces betwee ret beig paid ad curret market ret. I Jauary 2007 the Museum of Performace closed to the public, with the collectio to be redisplayed at the mai site. I cosideratio of a paymet of 1m to the V&A, the lease at the Museum of Performace was varied to expire i 18 moths with a reductio i the retal charge. The 1m has bee desigated ad will be put toward the future developmet of the theatre collectio at South Kesigto. The appropriate basis of valuatio for fiacial statemets is ormally existig use value. However, the Museum i Cromwell Road ad the Museum of Childhood i Bethal Gree are of such a costructio ad specialised use that a Existig Use basis of valuatio is iappropriate. The lack of demad or market value for the property i isolatio from its curret use is such that the lad ad buildigs are most appropriately valued accordig to their Depreciated Replacemet Cost. 7 Ivestmets 2008 2007 000 000 Market value at 1 April 2007 10,876 6,422 Add: Acquisitios at cost 19,119 11,586 Less: Disposal proceeds (4,563) (7,280) Net gai/(loss) o revaluatio (193) 148 Market value at 31 March 2008 25,240 10,876 Historical cost at 31 March 2008 25,127 10,283 Urealised ivestmet gai/(loss) at 31 March 2008 113 593 Ivestmet gai/(loss) based o historic costs 386 767 All ivestmets are listed o a recogised stock exchage ad are aalysed as follows: 2008 2007 000 000 Ivestmet assets i the UK 18,688 6,447 Ivestmet assets outside the UK 6,552 4,429 25,240 10,876 All ivestmets are classified as fixed asset ivestmets give that these assets are for the log term use of the busiess. The above figures iclude the cosolidated Heather Trust for the Arts Ivestmets which total 9.56m. The Museum ivestmets are held i a charities commo ivestmet fud i order to mitigate risk o ivestmets ad improve returs. The Role of Fiacial Istrumets FRS 13, Derivatives ad other Fiacial Istrumets, requires disclosure of the role which fiacial istrumets have had durig the period, i creatig or chagig the risks the museum faces i udertakig its activities. As permitted by FRS 13, debtors ad creditors which mature or become payable withi twelve moths of the Balace Sheet have bee omitted from this ote. 44

Liquidity Risk The majority of icome (i.e. 54% excl. the Heather Trust for the Arts Edowmet) is received by way of Grat i Aid. The remaider of operatioal costs must be fiaced by self-geerated icome which is volatile. This risk is maaged through the Museum s policy to maitai geeral ad desigated fuds ad is reviewed periodically. Foreig Currecy Risk The Museum s exposure to foreig currecy risk is ot sigificat. Iterest Rate Risk The Museum has o exposure to iterest rate risk o its fiacial liabilities. The iterest risk o its fiacial assets are as follows: Weighted Weighted Floatig Fixed No-iterest Assets Average Average Rate Rate Bearig Earig Fixed Period Fiacial Fiacial Fiacial Equity iterest for which Total Assets Assets Assets Retur rate rate is fixed 000 000 000 000 000 % Yrs At 31 March 2008 Sterlig 35,639 16,639 7,277 312 11,411 5.66% 8.69 Other 7,594 906 688 136 5,864 0.45% 0.57 Total 43,233 17,545 7,965 448 17,275 5.21% 7.99 As at 31 March 2007 Sterlig 20,812 14,040 3,965 324 2,483 6.01% 10.20 Other 5,056 572 148 55 4,281 0.21% 0.23 Total 25,868 14,612 4,113 379 6,764 5.80% 9.84 Recociliatio to Accouts 2008 2007 000 000 Cash 17,993 14,870 Ivestmets (Fixed Assets) 25,240 10,876 Debtors (Accrued iterest portio oly) 122 43,233 25,868 8 Tradig subsidiary The Museum ows the whole of the issued share capital of V&A Eterprises Limited, a compay registered i Eglad ad Wales. The compay s pricipal activities are the sale of books ad other materials relatig to art, craft ad desig, ad the gratig of liceces of goods ispired by, or reproduced from, artefacts displayed i the Museum. The compay rus V&A Publicatios ad V&A Picture Library ad operates both a corporate etertaimet busiess ad the educatioal services facility based at the Museum. I respect of a u-draw overdraft facility Coutts & Co hold a Mortgage Debeture dated 22 March 1988 over the compay s assets. This is i the form of a floatig charge. I additio there is a loa facility of 2m exteded to V&A Eterprises Limited by the Museum. The Museum also ows 100% of the issued share capital of V&A Holdigs Limited which i tur ows 100% of the issued share capital of V&A Limited which ra the V&A Golde Age of Couture Gala o behalf of the Museum durig the year. These accouts have also bee cosolidated with the results of the Museum. 45

A summary of the results of the subsidiaries is show below: V&A Limited V&A Eterprises Limited 2008 2007 2008 2007 Profit ad loss accout 000 000 000 000 Turover 653 10,060 9,489 Cost of sales (3,551) (3,519) Gross Profit 653 6,509 5,970 Admiistrative expeses (459) (4,804) (4,304) Tradig profit 194 1,705 1,666 Iterest receivable ad similar icome 82 31 Paymet uder gift aid to Museum (194) (1,786) (1,677) Profit o Ordiary Activities before Taxatio 1 20 Taxatio (1) (20) Retaied i subsidiary 2008 2007 2008 2007 Balace sheet 000 000 000 000 Tagible fixed assets 184 308 Curret assets 194 4,849 3,304 Creditors due withi oe year (194) (3,830) (3,409) Creditors due after oe year (1,000) Net assets 203 203 Share capital ad reserves 203 203 Recociliatio of results of tradig compay to the cosolidated Statemet of Fiacial Activities: 2008 2007 2008 2007 000 000 000 000 Turover 653 10,060 9,489 Itercompay trasactios Tradig icome icluded withi SOFA 653 10,060 9,489 Cost of sales 3,551 3,519 Admiistrative expeses 459 4,804 4,304 Taxatio 1 20 Itercompay trasactios (86) (55) Tradig costs icluded withi SOFA 459 8,270 7,788 Iterest receivable ad similar icome 82 31 Itercompay trasactios Icluded i Ivestmet Icome per SOFA 82 31 46

Heather Trust for the Arts I March 2008 the V&A etered ito a agreemet with the Heather Trust for the Arts (custodias of The Rosalide ad Arthur Gilbert Collectio, a collectio of silver, gold, micromosaics ad gold boxes) to display this substatial collectio at the V&A. O the 18 March 2008 effective cotrol of the Heather Trust for the Arts passed to the V&A as part of the agreemet metioed above. The V&A has effective cotrol of the Board of the Heather Trust for the Arts with the appoitmet of V&A trustees oto the Board of the Heather Trust for the Arts ad accordigly its results have bee cosolidated ito the museum s results as follows: 2008 Statemet of Fiacial Activities 000 Doatios 9,556 Iterest 2 Other Icome 90 Admiistrative expeses (1) 9,647 Balace sheet Ivestmets 9,556 Cash 92 Creditors (1) Total Fuds 9,647 As the above Ivestmets held i the Heather Trust for the Arts balace are a permaet edowmet these are show as such i ote 14 to the accouts. 9 Debtors Group Museum Group Museum 2008 2008 2007 2007 000 000 000 000 Trade debtors 1,780 1,354 2,013 1,859 Other debtors 194 148 195 153 Prepaymets ad accrued icome 2,020 1,542 1,562 1,126 Prepaid exhibitio expediture 1,494 1,494 1,673 1,673 Recoverable taxatio 1,353 1,353 1,598 1,598 Amouts due from subsidiary udertakig 2,755 2,103 6,841 8,646 7,041 8,512 Amouts fallig due after oe year Debtors after oe year 1,000 1,000 Durig the year the Museum formalised the workig capital elemet of its itercompay balace with its tradig subsidiary. This was doe i the form of a itercompay loa for 1,000,000. The loa is repayable o demad ad is secured by a floatig charge o all of the subsidiary s assets. The Museum has cofirmed that it will ot call the loas for repaymet util, at the earliest 30 Jue 2013, ad the subject to the ability of the subsidiary to make repaymets. Iterest o the loa is charged at 1% above the Bak of Eglad Base rate. 47

10 Creditors Group Museum Group Museum 2008 2008 2007 2007 000 000 000 000 Amouts fallig due withi oe year Trade creditors 1,072 769 1,125 878 Other creditors 3 3 40 40 Accruals 5,525 4,978 4,732 4,321 Deferred icome 11 3,305 3,305 3,535 3,535 Deferred exhibitio icome 741 741 265 265 Taxatio ad social security costs 901 901 980 878 Provisios withi oe year 12 95 95 145 145 11,642 10,792 10,822 10,062 Amouts fallig due after oe year Provisios after oe year 12 139 139 187 187 139 139 187 187 11 Deferred Icome 2008 2007 000 000 As at 1 April 2007 3,536 3,518 Deferred i curret year 75 185 Released from previous year (306) (167) As at 31 March 2008 3,305 3,536 Of this balace 3.23m represets fuds give to the Museum by RIBA i relatio to its occupatio of certai office ad gallery spaces i the Museum. A amout represetig a aual retal paymet is released each year. 12 Provisios 2008 2007 000 000 As at 1 April 2007 333 521 Provisio i year 164 86 Paid i year (262) (274) As at 31 March 2008 235 333 The provisios relate to those early retirig employees for whom the Museum will cotiue to pay PCSPS cotributios util they reach 60 years old. 13 Fiacial commitmets At 31 March 2008 the Museum had aual commitmets uder o-cacellable leases as follows: 2008 2008 2007 2007 Operatig leases which expire: Lad & Lad & Buildigs Other Buildigs Other 000 000 000 000 Withi oe year 35 13 13 Betwee two to five years 530 192 605 48 After five years 103 668 205 605 61 48

14 Statemet of fuds Gais/ As at As at Icomig Resources losses & 31 March 1 April 2007 Resources Expeded Trasfers Revaluatio 2008 000 000 000 000 000 000 Urestricted Fuds Geeral Icome fuds 4 1,000 53,749 (52,114) (1,635) 171 1,171 Desigated Icome fuds 4 1,147 1,009 (766) 1,587 2,977 Bequests 4,598 202 (21) (8) 4,771 Desigated Capital fuds 4 1,072 (5,451) 5,374 995 Total Urestricted Fuds 7,817 54,960 (58,352) 5,326 163 9,914 Restricted Fuds Restricted Icome Fuds Acquisitios for the Collectio 247 327 (399) 175 Collectios fuds 3 1,700 1,828 (766) (28) 1 2,735 Exhibitios & Cotemporary 12 74 (19) 67 Educatio,Learig & iterpretatio 124 1,509 (1,161) 50 522 Brach Museum fuds (73) 643 (390) 180 Museum Developmet fuds 8,923 14,197 (12,490) (171) 10,459 Permaet edowmet icome 477 215 (43) 197 63 909 11,410 18,793 (15,268) 48 64 15,047 Restricted Capital fuds 2 331,103 (371) 11,001 (5,781) 8,883 344,834 Acquisitios restricted fud 1 30,801 3,556 407 34,765 361,904 3,185 11,001 (5,374) 8,883 379,599 Total Restricted Fuds 373,314 21,978 (4,267) (5,326) 8,947 394,646 Permaet edowmet 5,003 1,160 (164) 5,998 Heather Trust for the Arts 9,556 9,556 Total Edowmet Fuds 5,003 10,716 (164) 15,555 Total Fuds 386,134 87,654 (62,619) 8,946 420,115 1 Trasfers are made each year from Urestricted to Restricted fuds i respect of the Govermet fuded portio of Capital movemets sice the assets are subject to restrictios o their disposal. 2 Trasfers have bee made from Restricted to Urestricted fuds i respect of the capital fuds i order to show the value of the Museum s fixed assets as separate restricted ad desigated fuds. 3 Trasfers are made from Restricted fuds followig the ed of the specific projects oly whe this is i lie with the door s wishes for the use of the fuds 4 Trasfers are made each year from urestricted fuds i order to fud desigated acquisitios ad to cotribute to restricted fuds as required. Urestricted fuds geeral The geeral fuds cosist of the accumulated surplus or deficit o the Statemet of Fiacial Activities. The amout of these available for use at the discretio of the Trustees i furtherace of the geeral objectives of the Museum is detailed i ote 15. Urestricted fuds desigated These fuds comprise fuds which have bee set aside at the discretio of the Trustees for specific purposes. They cosist maily of the followig: Desigated Icome fuds a collectio of fuds which have bee set aside at the discretio of the Trustees for specific purposes. Bequests fuds which have built up over a umber of years from various bequests ad which have bee desigated by the trustees. Desigated Capital fuds expediture fuded from o restricted sources which has bee capitalised. These fuds represet the movemets of the fixed assets ad agree to the balace sheet values. 49

Restricted fuds These fuds are subject to specific restrictio imposed by the door, by the purpose of a appeal or are received for a specific purpose. They cosist maily of the followig: Acquisitios for the Collectio a collectio of fuds from various doatios, which are to be used to purchase items for the Collectio Collectio fuds fuds from various doatios, which are to be used to maitai ad support the Collectios Exhibitios & Cotemporary fuds fuds for the specific purpose of puttig o exhibitios Educatio, Learig & iterpretatio fuds a collectio of fuds to eable the Museum to provide Educatio facilities ad services Brach Museum fuds fuds specifically for the developmet of the Museum of Childhood ad the Theatre Collectio. The deficit balace will be cleared i the ext fiacial year as the fud is awaitig icome from a claim submitted to the Heritage Lottery Fud Museum Developmet fuds fuds received i relatio to FuturePla projects Permaet edowmet fuds icome icome arisig from the ivestmet of the Permaet edowmet fuds, which is to be used as agreed o origial receipt of the permaet edowmet Restricted Capital fuds fuds held for the maiteace ad revaluatio of the Museum s lad ad buildigs at South Kesigto, Bethal Gree ad Blythe House. These fuds represet the movemets of the fixed assets ad agree to the balace sheet values. Acquisitios These fuds represet the movemets i the capital value of the acquisitios ad agree to the balace sheet values. Permaet edowmet fuds These comprise fuds doated o coditio that the capital value of the doatio is held i perpetuity. With the cosolidatio of the Heather Trust for the Arts, the permaet edowmet held for the ogoig upkeep of the Gilbert Collectio by the Heather Trust has bee show as a separate permaet edowmet above. 15 Statemet of fud commitmets as at 31st March 2008 As at As at 31 March 31 March 2008 2007 000 000 Fuds available for spedig at Trustees Discretio: Geeral icome fuds 969 797 Desigated icome fuds 7,748 5,745 8,717 6,542 Fuds raised for specific purposes: Restricted icome fuds 15,047 11,410 Total fuds available for spedig 23,764 17,952 Fuds ot available for Trustees spedig: Geeral icome fuds share capital of V&A Eterprises 203 203 Permaet edowmet fuds (Capital elemet)) 15,555 5,003 Capital fuds (Fixed Assets) 380,594 362,976 Total fuds ot available for spedig 396,351 368,182 Total fuds i balace sheet 420,115 386,134 50

16 Aalysis of group et assets betwee fuds Urestricted Restricted Permaet Total Total Fuds Fuds Edowmet 2008 2007 Fuds 000 000 000 000 000 Fud balaces at 31 March 2008 are represeted by: Tagible fixed assets 1,179 379,599 380,778 363,285 Ivestmets 4,418 16,124 4,698 25,240 10,876 Curret assets 16,098 (1,077) 10,857 25,878 22,982 Curret liabilities (11,642) (11,642) (10,822) Provisio for liabilities ad charges (139) (139) (187) Net assets 9,914 394,646 15,555 420,115 386,134 17 Capital commitmets 2008 2007 000 000 Capital expediture commitmets were as follows: Cotracted for, but ot provided i the accouts 19,467 7,707 Authorised, but ot cotracted for 17,709 34,938 The majority of the capital commitmets relate to the Medieval ad Reaissace Gallery due to ope i late 2009 ad the Ceramics Gallery also due to ope i late 2009. 18 Related Party Trasactios The Victoria ad Albert Museum is a No-Departmetal Public Body (NDPB) sposored by the Departmet for Culture, Media ad Sport (DCMS). Other bodies sposored by DCMS are regarded as related parties, as are orgaisatios i which Trustees or key members of maagemet (or their coected persos) have a iterest. Durig the year, the Victoria ad Albert Museum oly etered ito trasactios with related parties uder ormal busiess terms. Related Party Year ed Year ed Doatios/ Amout Amout balace balace Grats Purchased Sold Debtors (Creditors) Received 000 000 000 000 000 Imperial War Museum 26 Natioal Heritage Memorial Fud 1,750 Natural History Museum 1,378 299 1 Royal College of Art 33 145 143 Sciece Museum 401 77 51 (54) TATE all sites 2 43 3 The Natioal Gallery 26 6 Pearso Group 37 British Museum 43 Three trustees doated a total of 3.75m durig the year. The balaces with the Natural History Museum ad Sciece Museum relate to supplies of electricity, heatig, storage ad telephoe services. No other Trustees or staff member obtaied ay persoal pecuiary beefit from these trasactios ad o trustee or staff member had ay other material trasactios with the Museum i the year. No trustees held ay sigificat iterests which would coflict with their maagemet resposibilities of the Museum. The Director ad Deputy Director of the Victoria ad Albert Museum serve uremuerated o the Board of V&A Eterprises Limited. 19 Cotiget Liabilities There are o cotiget liabilities as at 31st March 2008 (2007: Nil). 20 Post Balace Sheet Evets There were o post balace sheet evets except for the authorised for issue date as disclosed o the balace sheet. 51

52 21 The Super SOFA (Statemet of Fiacial Activities) The Super SOFA shows the results for the year from the SOFA split betwee the differet areas to which the icome ad expediture relates. INCOME AND EXPENDITURE FUNDS CAPITAL FUNDS COLLECTION AND ACQUISITION TOTAL FUNDS FUNDS 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 Urestricted Desigated Urestricted Restricted Perm Edow Total Urestricted Restricted Total Urestricted Restricted Total Urestricted Restricted Perm Edow Total fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds Geeral 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 Icomig Resources Icomig resources from geerated fuds Volutary icome Grat i Aid 38,527 38,527 485 39,012 3,250 3,250 38,527 3,735 42,262 Doatios, legacies ad similar icome 1,115 1,115 11,416 10,716 23,247 1,115 11,416 10,716 23,247 Doated objects 3,185 3,185 3,185 3,185 Activities for geeratig fuds Tradig Icome 10,060 653 10,713 10,713 10,713 10,713 Sposorship 175 175 119 294 175 119 294 Ivestmet Icome 422 202 624 718 1,342 624 718 1,342 50,299 855 51,154 12,738 10,716 74,608 3,250 3,250 3,185 3,185 51,154 19,173 10,716 81,043 Icomig resources from charitable activities Lottery icome 2,229 2,229 2,229 2,229 Admissio & exhibitio fees (icl loas & tourig) 2,721 2,721 10 2,731 2,721 10 2,731 2,721 2,721 2,239 4,960 2,721 2,239 4,960 Other icomig resources Other icome 729 356 1,085 566 1,651 1,085 566 1,651 Exceptioal item icome 729 356 1,085 566 1,651 1,085 566 1,651 Total icomig resources 53,749 1,211 54,960 15,543 10,716 81,219 3,250 3,250 3,185 3,185 54,960 21,978 10,716 87,654 Resources expeded Cost of geeratig fuds Costs of geeratig volutary icome 2,933 2,933 4 2,937 192 53 245 3,125 57 3,182 Fudraisig Tradig costs 8,271 459 8,730 8,730 8,730 8,730 Ivestmet maagemet costs 34 21 55 31 86 55 31 86 11,238 480 11,718 35 11,753 192 53 245 11,910 88 11,998 Charitable activities Collectios & Visitors 28,983 307 29,290 10,684 39,974 4,870 (7,670) (2,800) (407) (371) (778) 33,753 2,643 36,396 Exhibitios & Cotemporary 6,025 6,025 93 6,118 183 72 255 6,208 165 6,373 Educatio, Learig & iterpretatio 5,213 5,213 1,206 6,419 528 137 665 5,741 1,343 7,084 40,221 307 40,528 11,983 52,511 5,581 (7,461) (1,880) (407) (371) (778) 45,702 4,151 49,853

21 The Super SOFA (Statemet of Fiacial Activities) (cot d) INCOME AND EXPENDITURE FUNDS CAPITAL FUNDS COLLECTION AND ACQUISITION TOTAL FUNDS FUNDS 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 Urestricted Desigated Urestricted Restricted Perm Edow Total Urestricted Restricted Total Urestricted Restricted Total Urestricted Restricted Perm Edow Total fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds fuds Geeral 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 Goverace costs 655 655 655 85 28 113 740 28 768 655 655 655 85 28 113 740 28 768 Total resources expeded 52,114 787 52,901 12,018 64,919 5,858 (7,380) (1,522) (407) (371) (778) 58,352 4,267 62,619 Net resources before otioal costs 1,635 424 2,059 3,525 10,716 16,300 (5,858) 10,630 4,772 407 3,556 3,963 (3,392) 17,711 10,716 25,035 Notioal Costs (62) (62) (67) (9,581) (9,648) (67) (9,643) (9,710) Net resources after otioal costs 1,635 424 2,059 3,463 10,716 16,238 (5,925) 1,049 (4,876) 407 3,556 3963 (3,459) 8,068 10,716 15,325 Reversal of otioal costs 62 62 67 9,581 9,648 67 9,643 9,710 Net resources before trasfers 1,635 424 2,059 3,525 10,716 16,300 (5,858) 10,630 4,772 407 3,556 3,963 (3,392) 17,711 10,716 25,035 Gross trasfers betwee fuds (1,635) 1,587 (48) 48 5,781 (5,781) (407) 407 5,326 (5,326) Net after trasfers 2,011 2,011 3,573 10,716 16,300 (77) 4,849 4,772 3,963 3,963 1,934 12,385 10,716 25,035 Gais/(losses) o ivestmet assets 171 (8) 163 64 (164) 63 163 64 (164) 63 Gai o revaluatio of fixed assets for the charity s ow use 8,883 8,883 8,883 8,883 Net movemet i fuds 171 2,003 2,174 3,637 10,552 16,363 (77) 13,732 13,655 3,963 3,963 2,097 21,332 10,552 33,981 Fud balacs bfwd at 1 April 2007 1,000 5,745 6,745 11,410 5,003 23,158 1,072 331,103 332,175 30,801 30,801 7,817 373,314 5,003 386,134 Fud balaces cfwd at 31 March 2008 1,171 7,748 8,919 15,047 15,555 39,521 995 344,835 345,830 34,764 34,764 9,914 394,646 15,555 420,115 Value of acquisitios i year Free Reserves : Geeral, desigated & bequest Operatioal result for the year 53

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