Treasurer’s Report

Treasurer’s Report 2021

I am pleased to present the annual financial report as Treasurer of the British Columbia Photography and Media Arts Society, which operates as The Polygon Gallery (“The Polygon”).

The following is a synopsis of The Polygon’s financial results for 2021 which should be read in conjunction with the audited financial statements. The statements include an unqualified audit opinion and provide a summary of The Polygon’s financial position as at December 31, 2021 and for the fiscal year then ended.

Statement of Financial Position

The Polygon’s statement of financial position continued to strengthen this past year. On December 31, 2021, the Polygon had a net accumulated surplus of $1,341 (compared to an accumulated deficit of $180,369 at the end of 2020). There were no significant capital additions during the year.

The liquidity position of the Polygon has also improved, with a positive working capital of $1,219 (compared to a working capital deficit of $200,369 in 2020). The unrestricted cash balance at the end of 2021 increased by $494,570 to $983,863, while restricted cash decreased by $243,282 to $212,518, year over year. The increase in unrestricted cash is mainly due to a corresponding increase in deferred revenues of $313,864, which includes grants earmarked for specific expenses (including Covid emergency support), deposits for venue rentals, and fundraising events to be held in 2022. Accounts receivable was $120,029 at year end, primarily from donations and the venue rentals program, all of which were successfully collected after year end. Prepaid expenses increased significantly by $101,344 to $268,621 at year end, mainly due to advance payments for the ongoing lobby renovation and higher insurance premiums. These short-term assets were offset by accounts payable and accrued liabilities of $175,135.

Promised gifts to the capital campaign are, under generally accepted accounting principles, not reflected in the financial statements. To bridge the timing difference between the completion of The Polygon’s construction and receipt of these pledged donations, the Gallery has drawn on a financing facility, provided by TD Bank Group. The balance is to be repaid upon receipt of future pledges over the remaining life of the loan, which matured at the end of 2021. On March 28, 2022, the City of North Vancouver directly replaced the financing facility provided by TD Bank Group under the same terms and conditions, with a new maturity date of March 27, 2027. As of the date of this report, the loan balance stands at $347,000.

Statement of Operations

The Polygon remained opened throughout 2021, despite capacity limitations due to public health measures. I am pleased to report that The Polygon ended its 2021 fiscal year with a meaningful excess of revenues over expenses of $181,710 (2020: $106,140).

Total revenue increased by $759,723 (26.0%) to $3,678,129 from 2020. Earned revenues (primarily made up of retail and venue rentals revenues) contributed to much of the increase, doubling to $880,263 as The Polygon Shop saw record sales and larger events filled the Gallery in 2021. Admissions revenue also increased by $64,497, nearly tripling that of 2020 when the Gallery was closed for 3 months due to provincial health orders. The Polygon hosted one fundraising event in 2021 with revenues of $117,375 after not hosting the year prior. Although Covid emergency funding decreased by $203,782 as business operations returned to normal, private donations and sponsorship revenue increased by $178,375 to $801,205, thanks to the generosity of steadfast donors and the unwavering efforts of The Polygon’s staff, with the support of the Board’s Development Committee.

Similarly, expenses increased by $684,153 (24.3%) to $3,496,419, from $2,812,266 in 2020. Programing expenses saw the most significant increase of $208,731 highlighting the Gallery’s commitment to our exhibition and outreach programs. Wages and employee benefits also increased by $183,970, as operations began to return to pre-pandemic levels, and guest services and venue rental staff hours increased correspondingly. Direct expenses related to earned revenues also increased by $146,679 (91.0%) over the previous year.

The pandemic has challenged every aspect of The Polygon’s operation. I am impressed by how The Polygon team has met the challenges with creativity and adaptability to ensure that The Polygon remains financially viable and in growing health.

I wish to thank the Board of Directors’ Finance Committee, which has been instrumental in overseeing the financial interests of The Polygon, and the entire Board of Directors for their inquisitive involvement with its financial operations. A special thank you to our Financial Controller, Molly O’Callaghan, for her leadership and commitment to continuous improvement in our finance department. I am honoured to be part of such an inspirational organization.

Kathleen Butt, CPA, CA