Dundee Contemporary Arts produced a smaller net deficit last year but pension costs have plunged the charity’s balance sheet deep into the red.
The total income was up 8.5% at £1.9 million for the year to March 31, 2014 in the Nethergate centre’s accounts which have been lodged at Companies House.
All main charitable activities generated increased funds, and the trustees said they were pleased with the performance given the continued economic conditions.
Income came mainly from Creative Scotland (£683,000); Dundee City Council (£257,000); other funders (£74,600) and charitable trading from the cinema, print studio, shop and miscellaneous (£728,328).
Expenditure increased by 7% to £1.958m resulting in a net deficit down 30% at £48,997. An expense during the year was the refit of the shop.
The defined benefit pension liability of the 42 full-time equivalent employees of £747,000 was almost double the 2013 figure of £385,000.
This resulted in net liabilities of £364,089 compared with just £13,661 the previous year.
The trustees reported: “The pension deficit is a long-term issue and is dependent upon stock market performance, financial assumptions relating to interest rates, inflation and future pay increases as well as assumptions relating to life expectancy and the employee age profile.
“At the present time the trustees are satisfied that the company can continue to meet the costs of future contributions as advised by the actuary. However, this matter will continue to be monitored closely.”
DCA staff are part of the Tayside Pension Fund administered by Dundee City Council which provides defined benefits based on final pensionable salary. The assets of the scheme are held separately from the company.
Financial planning and factoring for costs of pensions is a difficult challenge and an organisation has to account for retirement benefits at the point which it commits to paying them even though the actual payment will be made years into the future.
DCA’s planned surplus from normal activities prior to pension and refurbishment adjustments was £36,572.
DCA was actively involved during the year in Dundee’s bid for the title of UK City of Culture 2017. The prize went to Hull but Dundee’s bid was well regarded by the event’s judges.
The year saw the galleries feature exhibitions designed to appeal to broad and specialist audiences, and its community education team deliver high-profile events and develop relationships with partners.
The cinema reported record audiences for a programme ranging from foreign language to quality independent film-making to a range of alternative content including live theatre, ballet and opera.
The DCA shop met ambitious retail targets, and the print studio saw the culmination of two years planning and preparation with the first Print Festival Scotland.
DCA played a key role in new initiatives including the Blue Sky Festival in collaboration with Dundee Science Centre, Dundee Rep Theatre, Leisure & Culture Dundee, Smallpetitklein and others.
The trustees said they are satisfied with the results for the year and feel that the company has achieved its prime objective of promoting the arts and culture for the people of Dundee and beyond.