As explained below, the Society’s budget aims to fund its events, grants and publications from its income. Although expenditure has exceeded income this year, approximately £3,000 has been the exceptional expenditure incurred through the unique occasion of the opening of the new Museum; the provision of an office for the Society resulted in the Council agreeing to one-off expenditure on acquiring furniture for the office to include provision for the Society’s publications and the Council agreed both to pay for a publication about the Leeds mummy and to contribute to a case for the DNA model. Otherwise, the financial outcome has been consistent with the aim to balance expenditure against investment income in the medium term.
The Society’s financial position has been monitored regularly by the Council and in discussions with representatives of Rensburg Sheppards, our investment advisers. Income from investments has been maintained during the year, but it will not come as a surprise that the financial turmoil of the latter part of 2008 has seen a substantial fall in the value of the Society’s investments. As yet, the extent to which this will affect our income over the next few years is uncertain.
The Society’s reserves comprise 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 usually 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.
STATEMENT OF COUNCIL MEMBERS’ RESPONSIBILITIES
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 Acts 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.
Approved by the members of the Council on 12 November 2008, and signed on their behalf by
C. J. Hatton (President) and A. C. T. North (Treasurer)