and Literary Society
Registered Charity: 224084
As explained below, the Society’s budget aims to fund its events, grants and publications from its income. In contrast to 2005/6, in which expenditure exceeded income, this year has seen the reverse outcome. The two main factors in this change were (1) the heavy expenditure in 2005/6 on the publication of Building Stones, (2) a deliberate cap on the award of new grants. The actual total of grant payments was significantly greater than appears under ‘Resources Expended’ because a number of grants awarded in previous financial years became due for payment. These were listed under ‘Grants Payable’ and ‘Creditors’ in last year’s accounts. Despite the cap, the Grants Committee considers that no applications were turned down that it would otherwise have wished to support and the outcome has been consistent with the aim to balance expenditure against investment income in the medium term.
Following discussions with Rensburg Sheppards, our investment advisers, income from investments has increased slightly and the Society’s investments portfolio has likewise increased in value.
The Society holds reserves in the form of an unrestricted fund derived from past benefactions and its annual subscriptions, including the proceeds from the sale of the Philosophical Hall to Leeds City Council in 1921. The fund has increased in value over the years as income exceeded expenditure. Since the Society adopted its new constitution in 1997, Council’s aim in the medium term has been to balance its expenditure and income without depleting the capital value of its investments. The Society’s income and expenditure do, however, vary from year to year depending on a number of
factors. The Council therefore considers it prudent to hold liquid reserves in the Charities Deposit Fund and current bank account. The amount held in liquid reserves is a minimum of £5,000 (roughly 25% of current average annual expenditure). This sum may be supplemented from time to time by provision for major expenditure to which the Council is committed in the coming year (if the anticipated income in that year will not be sufficient), or for major expenditure the possibility of which it foresees over the coming five-year period. The policy on reserves is reviewed annually by the Council as part of its annual budget review.
There are no restrictions in the Society’s Memorandum and Articles on the Society’s power to invest. The Council’s investment objectives are to maintain a level of income sufficient to fund the Society’s activities, while maintaining the capital value of its invested assets over the long term in line with inflation. To this end, it is the Society’s normal practice to reinvest realised gains on its assets. The Council has delegated the management of its investments on a discretionary basis to Rensburg Sheppards.
1) Income: The investment managers pursue an active investment policy on the Society’s behalf. The arrangements are regularly reviewed by the Trustees.
2) Expenditure: Expenditure on individual Grants, Publications and Events represent a small part of total expenditure and risks are minimised by standard procedures for authorisation of all financial transactions. The potential risks at the Society’s events are considered as part of the planning for them, and appropriate steps are taken, including the arrangement of Public Liability insurance as necessary.
3) The quality of the Society’s Events and Publications and the outcome of Grants that have been awarded are reviewed by the Trustees at their regular meetings so as to ensure that all the Society’s activities are of a high standard consonant with its Aims.
Company law requires the Council members to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company at the year end and of the incoming resources and application of resources for the year. In preparing those financial statements, Council members are required to:
· Select suitable accounting policies and then apply them consistently
· Make judgements and estimates that are reasonable and prudent
· Prepare the financial statements on a going-concern basis unless it is inappropriate to presume that the Company will continue its activities.
Council members are responsible for keeping proper accounting records which disclose with reasonable accuracy the financial position of the Company at any time and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company, ensuring their proper application in accordance with charity law and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.