Annual Report and Financial Statements for the Year ended 28 February 2011
Our 2010 Annual report was the winner in the Charities Online Financial Reporting Awards in the below £250,000 income category.
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Finances: Intro | Summary | Detail Analysis | Investments | Reserves | Other Details | Trustee Responsibilities
The attached financial statements show the current state of the finances of the Society. The highlights are:
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| Significant changes in income less expenditure: | £ |
|---|---|
| Net deficit for year to 28 February 2010 | (1,144) |
| Reduction in donations expenditure | +1,000 |
| Reduction in subsidy on Tours & Trips | +452 |
| Increase in Rehearsal premises expenditure | (235) |
| Reduction in Interest income | (214) |
| Increase in Governance costs | (192) |
| Net impact of other changes to income and expenditure | (496) |
| Net deficit for year to 28 February 2011 | (829) |
The committee is comfortable with the level of the total deficit incurred during the year, including the deficit of £1,829 incurred on the general funds after transfers to designated and restricted funds.
The results reflect the committee's ongoing aim of reducing the level of reserves held by the Society towards the target amount of £7,500 as detailed in the reserves policy section of this report.
The results for the year include discretionary expenditure of £1,052 in relation to the subsidy of the orchestra trip to Shetland in October 2010 and the discretionary designation of funds for the £1,000 donation to CLAN. The committee consider the recurring income and expenditure of the Society to be broadly balanced.
Concert income for the year has decreased mainly as a consequence of differences in the number of smaller commercial concerts undertaken during the year. Concert & competition expenditure was also lower, primarily as no taster sessions were organised during the year, compared to two taster sessions in the previous year. The surplus from concert & competition activities was £43 higher than the previous year.
Income and expenditure from Tours and trips has varied due to differences in the numbers of members and guests travelling to the Shetland Festival this year compared to last year, as well as the reduced level of member subsidy by the Society. The deficit for Tours and trips was £452 lower this year.
Fundraising income has decreased, largely relating to lower sales of the Society's three CDs. The amount raised via Easyfundraising was also lower this period reflecting members' shopping activity. Fundraising expenditure had decreased reflecting the lower level of CD sales achieved in the year and level of stock provisions. The net surplus from fundraising activities was £103 lower than last year.
Non-commercial concert donations were £95 lower in the current year, reflecting a small reduction in the number of performances undertaken, with a reduction in other donations as well as last year included the estimated value of donated office equipment.
Interest income is £102 lower as a result of the previous fall in interest rates, with further reductions in rates on both deposit and fixed term accounts in the current year as well. In addition our bank balances have been lower through the year compared to last year.
Rehearsal premises costs are £235 higher as a consequence of the increased rent costs charged by Aberdeen City Council.
A donation of £1,000 to CLAN (Cancer Link Aberdeen & North), an Aberdeen based cancer support charity, was proposed and agreed at the AGM in May 2010. It was not presented until after the end of the accounting year. This has been recorded as a designated fund at the year end and resulted in nil donation expenditure for the year. Last year the Society donated £1,000 to the Archie Foundation.
Admin and other costs are £228 higher, primarily due to additional depreciation charges on the photocopier which the committee agreed to dispose of during the year because of its very high cost of toner cartridges plus the cost of advertising the new concert session in September 2010.
Governance costs are £192 higher, primarily as the Society has appointed a firm of chartered accountants, who are providing their services at cost, to act as its independent examiner. Previously we had benefited from examiners providing their services on a voluntary basis. However, it has been more difficult to find willing volunteers who had the required time, qualifications and knowledge of charity accounts and reporting.
The net cash resources of the general funds is £12,761, a reduction of £1,441 compared to last year. This reflects the general funds deficit for the year of £1,829 after adjusting for non-cash items, such as depreciation charges, as well as changes in other current assets and current liabilities.
The existing £4,000 of fixed rate bonds matured and the committee agreed to reinvest some of the balance in further fixed rate bonds. However, as the interest differential to instant access deposit accounts was marginal only £2,000 was reinvested. As a result there has been an increase in the balances of Cash at bank and in hand compared to last year, with an offsetting reduction in fixed term deposit balances.
The members of the orchestra volunteer their time through weekly rehearsals, attending concerts and assisting with fundraising efforts.
The investment policy applicable during the reporting year was as follows:
The Society invests funds, including endowed funds, in deposit accounts with recognised UK financial institutions which may be of a fixed term nature. The aim of such investments is to achieve the best available investment income returns, balanced against minimising risk to capital, whilst meeting the cashflow requirements of the Society.
Given the low interest rates on fixed rate bonds that the Society has been able to achieve on its endowed fund investments the committee began the process of reviewing and updating its investment policy. Following the maturity in January 2011 of the latest fixed rate bonds held by the endowed funds, and pending final approval of a revised investment policy, the funds were held in an instant access deposit account.
A revised investment policy was approved by the committee in March 2011 as follows:
Short to medium term funds are likely to be spent within the next five years. The funds will be invested in high interest deposit accounts which may be of a fixed term nature. The aim of such investments is to achieve the best available income returns, whilst minimising risk to capital and ensuring the cashflow requirements of the Society are met.
Long term funds, including the endowment funds, are not required to be spent within the next five years. They will be invested in collective investment schemes which seek income and long-term capital growth from a broadly diversified portfolio of assets including equities and fixed interest securities.
The Society holds endowed, restricted and unrestricted funds (the attached financial statements detail these funds). Unrestricted funds are held:
The amount and timing of certain sources of income is variable in nature. Expenditure, particularly relating to concerts, may be committed in advance of knowing total income from an event. The committee therefore considers it prudent to hold unrestricted reserves in the form of net current assets excluding stocks of £7,500.
This is considered sufficient to cover:
The net current assets excluding stocks of the unrestricted general purposes fund reported in the attached financial statements total £12,761 and therefore are considered to be above the level of reserves required for the ongoing needs of the Society. The committee continues to consider additional activities related to the Society’s objectives to which the excess reserves may be applied including:
A designated fund of £1,000 in relation to the donation to CLAN agreed at the May 2010 AGM was established during the year. The donation was presented in March 2011.
The level of reserves are reviewed by the committee regularly throughout the year. The minimum level of reserves for the ongoing needs of the Society is reviewed by the committee on an annual basis.
The Society’s bankers are:
Current Accounts:
CAF Bank, 25 Kings Hill Avenue, Kings Hill, West Malling, Kent, ME19 4JQ
Bank of Scotland, 54 John Street, Aberdeen, AB25 1LL
Deposit Accounts:
Scottish Widows Bank, 67 Morrison Street, Edinburgh, EH3 8YJ
Standard Life Bank, Cash Savings Department, PO Box 23966, Edinburgh, EH3 1BF
The Independent Examiner is:
Graeme Reid, Williamson & Dunn Chartered Accountants
3 West Craibstone Street, Bon-Accord Square, Aberdeen, AB11 6YW
This report has been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities (issued in March 2005), The Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006.
Approved by the committee and signed for and on their behalf by:
K Gill, Secretary
5 May 2011
Law applicable to charities in Scotland requires the trustees to prepare financial statements for each financial year which give a true and fair view of the charity’s financial activities during the year and of its financial position at the end of the year. In preparing financial statements giving a true and fair view, the trustees should follow best practice and:
The trustees are responsible for keeping accounting records which disclose with reasonable accuracy the financial position of the charity and which enable them to ensure that the financial statements comply with The Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Footnote 1: Calculated as cash and bank balances after adding debtors balances and deducting creditors balances.
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