The CBSO Development Trust
REPORT AND AUDITED FINANCIAL STATEMENTS
for the year ended
5 April 2023
Registered Charity No. 1042296
TRUSTEES’ REPORT for the year ended 5 April 2023
The CBSO Development Trust
Report of the Trustees 3 Report of the Auditors 8 Statement of Financial Activities 15 Balance Sheet 16 Statement of Cash Flows 17 Accounting Policies 18 Notes to the Financial Statements 21
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The CBSO Development Trust
TRUSTEES’ REPORT for the year ended 5 April 2023
The Trustees are pleased to present their annual report together with the financial statements of the charity for the year ended 5 April 2023.
The financial statements comply with the Charities Act 2011, the Trust Deed and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable to the UK and the Republic of Ireland (FRS102) (effective 1 January 2019).
OBJECTIVES AND ACTIVITIES
The objects of the Trust state that the Trustees shall hold the capital and income of the Trust upon trust, to apply the income and all or part of the capital towards the financial support of the City of Birmingham Symphony Orchestra (“CBSO”), in the promotion and advancement of its charitable object and activities, as the Trustees may, in their absolute discretion, think fit.
The strategies employed to achieve the charity’s aims and objectives are to:
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build an Endowment Fund to support the future sustainability of the CBSO;
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make financial grants to the CBSO to support their annual artistic plans;
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manage the funds held in accordance with agreed mandates and through the appointment of appropriately skilled investment managers.
ACHIEVEMENTS AND PERFORMANCE
Overall donations received in the year were £10,300 (2021/22: £108,000) comprising Unrestricted donations of £10,300 (2021/22 £450), Endowment donations of £nil (2021/22: £33,000) and Restricted donations of £nil (2021/22: £nil). The Trustees are grateful to the charity’s donors for their support during the year.
In addition, a transfer in of assets from the City of Birmingham Orchestra Endowment Fund (CBOEF) as part of the wind down process of the CBOEF has been recognised in the year into the Endowment fund.
The charity incurred costs in relation to its investments, governance, and administration.
The charity made grants of £500,000 to the CBSO during the year.
FINANCIAL REVIEW
The total income for the year was £2,861,078 (2021/22: £108,000), including the gift of £2,717,011, and legacy of £132,065 from the City of Birmingham Orchestra Endowment Fund (CBOEF) as part of the wind down process of the CBOEF.
Grants totalling £500,000 (2021/22: £nil) were made to the CBSO and governance costs of £13,230 (2021/22: £11,000) and investment charges of £16,298 (2021/22: £168,000) were paid during the year.
The net surplus for the year after unrealised gains on investments was £2,159,993 (2021/22: £312,000).
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The CBSO Development Trust TRUSTEES’ REPORT for the year ended 5 April 2023
RESERVES
Reserves Policy
The Trustees’ policy is to:
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retain sufficient unrestricted funds to cover known commitments;
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manage its Endowment funds in line with the Declaration of Trust with Arts Council and the wishes of donors and to generate an annual income stream for the benefit of the CBSO;
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use its restricted reserves only in accordance with the specific wishes of the donors.
The reserves policy is reviewed annually by the Trustees.
Restricted funds:
These comprise restricted funds as follows:
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CBSO Centre fund which represents donations received from supporters less costs paid for the building and upkeep of the CBSO Centre. No transactions occurred in the year and total reserves remain at £13,000 (2021/22: £13,000).
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CBSO Music Director Fund. A £nil (2021/22: £nil) grant was made from the fund to cover music director costs incurred by the CBSO in the 2022/23 financial year. At 5 April 2023 total reserves were therefore £61,000 (2021/22: £61,000).
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CBSO Centenary Fund: At 5 April 2023 total reserves were £nil (2021/22: £250,000). This balance represented donations of which £nil was received during the current year (2021/22: £nil) to support the CBSO’s centenary activities. The fund was paid over to CBSO during the year to support the October 2022 tour to the U.S.A. which had been postponed from October 2020 owing to Covid-19 restrictions.
At 5 April 2023 these reserves were therefore £74,000 (2021/22: £324,000).
Expendable Endowment funds:
Endowment donations of £nil (2021/22: £33,000) were received during the year. The gift of £2,717,011 from the City of Birmingham Orchestra Endowment Fund (CBOEF) as part of the wind down process of the CBOEF was received during the year, and legacy of £132,065 was accounted for during the year. The fund decreased as a result of investment losses of £168,083 (2021/22: gains of £383,000) during the year. Investment costs of £16,298 (2021/22: £168,000) were charged to the fund and a grant of £250,000 (2021/22: £nil) was paid to the CBSO.
At 5 April 2023 these reserves were therefore £6,014,694 (2021/22: £3,600,000).
Unrestricted funds:
This represents all funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity.
At 5 April 2023, these reserves were £225,419 (2021/22: £230,000).
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The CBSO Development Trust TRUSTEES’ REPORT for the year ended 5 April 2023
INVESTMENT POLICY AND PERFORMANCE
The investments held by the charity were acquired in accordance with the powers available to the Trustees.
The charity’s investment policy has not changed during the year and remains to ‘produce the best financial return with a relatively low level of risk’ with a secondary objective of guarding against inflation. The extent to which social, environmental and ethical considerations are taken into account in the investment policy is considered by the Investment Committee of the charity.
The long-term investment objective is to achieve a return of UK CPI +4% per annum.
In order to achieve this long-term objective, the trustees have adopted a multi asset class approach with Partners Capital which includes investments in:
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The Master Portfolio – a £2m investment was originally made in September 2016. Over the long term it is expected that 85% of investment assets will be held in this multi asset portfolio.
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Private Equity Funds. – Following initial investments in March 2018, further investments have been made since that date with the aim of bringing this private equity holding close to the longterm target of 15% of investment assets held.
At 5 April 2023 the total market value of the investments held by Partners Capital were as follows:
| At 31 March 2023 | At 31 March 2023 | At 31 March 2022 | At 31 March 2022 | |
|---|---|---|---|---|
| £’000 | % | £’000 | % | |
| The Master Portfolio | 2,745 | 82.4 | 2,919 | 85.8 |
| Private EquityFunds | 585 | 17.6 | 482 | 14.2 |
| Total | 3,330 | 100.0 | 3,401 | 100.0 |
There were no investments into the Partners Capital Master Portfolio during the year. Capital calls/ payments during the year into the Private Equity Funds totalled £120,002 (2021/22: £118,000).
The gift from the City of Birmingham Orchestra Endowment Fund (CBOEF) as part of the wind down process of the CBOEF was received at the year-end and was transferred in a balance held by Brewin Dolphin fund managers.
At the time of transfer, this fund was held across various asset classes as follows:
| At 31 March 2023 | At 31 March 2023 | |
|---|---|---|
| £’000 | % | |
| UK Bonds | 243 | 9.0% |
| Overseas Bonds | 364 | 13.4% |
| UK Equities | 442 | 16.3% |
| North American Equities | 510 | 18.8% |
| European Equities | 132 | 4.9% |
| Japanese Equities | 62 | 2.3% |
| Asia Pacific Equities | 125 | 4.6% |
| EmergingMarket Equities | 22 | 0.8% |
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The CBSO Development Trust
TRUSTEES’ REPORT for the year ended 5 April 2023
| At 31 March 2023 | At 31 March 2023 | |
|---|---|---|
| £’000 | % | |
| Global Investments | 154 | 5.7% |
| Absolute Return | 239 | 8.8% |
| Property | 77 | 2.8% |
| Commodities | 46 | 1.7% |
| Other Investments | 195 | 7.2% |
| Cash Product | 86 | 3.2% |
| Cash | 19 | 0.7% |
| Total | 2,717 | 100.0 |
The funds held by Brewin Dolphin were consolidated and moved over to be managed by Partners Capital in September 2023.
The loss on stating all of the above charity investments at market value at the year-end was £168,083 (2021/22: £383,000 gain).
Portfolio performance is benchmarked against both:
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a composite weighted benchmark made up of a multi asset class benchmark and a private equity benchmark to reflect the actual exposure of the portfolio and
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a simple 60/40 benchmark of global equities and bonds.
The return (net of all fees and expenses) of the CBSO Development Trust portfolio managed by Partners Capital during the 12 months ended 31 March 2023 was -5.4% (2022: +7.1%). The last fiscal year has been characterised by challenging market conditions, whereby risk assets broadly declined following rapidly rising inflation and interest rates, as well as geopolitical tension. Whilst energy price pressures stemming from the Ukraine-Russia conflict started to show signs of abating in the first quarter of 2023, markets remained turbulent, as evidenced by the US banking crisis that shortly followed. The portfolio outperformed both the 60/40 global equity and UK government bond index and the Composite Benchmark, which returned -6.4% and -7.5% respectively over the same period. Property, credit and absolute return asset classes were the key sources of outperformance for the portfolio. Since inception, the CBSO Development Trust portfolio has generated an annualised return of +5.9% (net of all fees and expenses) ahead of both the composite benchmark return of +5.1% p.a. (net) and the 60/40 equity/bond index return of +4.9%.
Under the agreement with its investment managers the Trustees receive monthly updates and quarterly performance reports and participate in annual performance reviews.
FUTURE PLANS
The charity will continue to provide financial support to the CBSO.
The charity acts as the custodian of the funds held which include a 25-year Expendable Endowment Fund held under a Declaration of Trust with Arts Council England and created with the support of the Catalyst Endowment Scheme. The charity has agreed a formal drawdown process with the CBSO which requires that annual proposals be submitted for any funding requests from Endowment Funds. Applications will reflect the wishes of Endowment donors where appropriate, and will be made for the delivery of artistic, educational or operational projects in line with the Declaration of
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The CBSO Development Trust TRUSTEES’ REPORT for the year ended 5 April 2023
Trust. The drawdown approved by the Trustees for the financial year ending 5 April 2024 is £171,000 (for the 2022/23 year this was £130,000).
The charity will continue to work with its investment managers to maximise the return on all Funds by reference to the agreed investment mandate and risk profile.
The charity remains committed to supporting the long-term financial security of the CBSO by making grants and by maximising the return on its investment funds and cash holdings.
FUNDRAISING PRACTICES
The charity does not undertake any direct fundraising activity – instead the CBSO has a professional and established Development Directorate, which strives to raise income to support all aspects of the CBSO’s work, independent of the CBSO Development Trust.
RISK MANAGEMENT
The trustees have reviewed major risks; systems and procedures have been established to manage those risks. The principal risk faced by the charity lies in the performance of its investments. This is mitigated by retaining expert investment managers and having a diversified investment portfolio.
An Investment Sub Committee meets at least twice a year to monitor the performance of the investment portfolio by reference to the benchmark set by and agreed with, the investment managers.
PUBLIC BENEFIT
In considering the strategies and policies of the charity, the Trustees have had due regard to the public benefit guidance published by the Charity Commission, in accordance with the Charities Act 2011.
GRANT MAKING
The policy of the charity to award grants to the CBSO has not changed during the year.
VOLUNTEERS
The charity does not employ volunteers.
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The CBSO Development Trust TRUSTEES’ REPORT for the year ended 5 April 2023
REFERENCE AND ADMINISTRATION DETAILS
Charity Registration Number 1042296 Registered Office CBSO Centre, Berkley Street, Birmingham, B1 2LF Our Advisers: Auditor Locke Williams Associates LLP Blackthorn House, St Pauls Square, Birmingham, B3 1RL Bankers HSBC Bank plc 130 New Street, Birmingham, B2 4JU Solicitors Shakespeare Martineau No. 1 Colmore Square, Birmingham, B4 6AA Investment Manager Partners Capital LLP 5 Young Street, London, W8 5EH Investment Manager Brewin Dolphin 9 Colmore Row, Birmingham, B3 2BJ
The Trustees who served during the year and since the year end are as follows:
Charles Barwell OBE Gordon Campbell Wally Francis (deceased 31 July 2022) Elizabeth Frostick (appointed 19 June 2023) Julianna Hall (appointed 19 June 2023) Chris Loughran (Chair) John Osborn David Pett
*Member of Investment Sub Committee
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The CBSO Development Trust
TRUSTEES’ REPORT for the year ended 5 April 2023
STRUCTURE, GOVERNANCE AND MANAGEMENT
Governing Document
The CBSO Development Trust is an unincorporated trust established by Deed of Trust on 16 November 1994 and amended by a Resolution dated July 2013. The Trust is a registered charity and was established for the financial support of the CBSO.
Organisation
The Trustees hold meetings on a regular basis to conduct the operations of the charity and implement its investment and other policies. An Investment Sub Committee meets at least twice a year to review the performance of its investment managers.
The day-to-day affairs of the charity are administered by staff employed by the CBSO for which no charge is made. There is therefore no chief executive officer or other senior management personnel on the date the report was approved and in the period.
Appointment of Trustees
The Trust Deed states that the power of appointment shall be vested in the Trustees acting independently and allows for up to 40% of Trustees to be nominated by the Board of Directors of the CBSO. All appointments shall be made for a term not exceeding three years and a Trustee on the expiring thereof, shall be eligible for re-appointment.
The total number of Trustees shall at no time exceed thirty or be less than three.
Trustee Induction and Training
New Trustees undergo an induction to brief them on their legal obligation under charity law, the content of the Deed of Trust, the decision-making process, and the budget and financial performance of the charity. Trustees are encouraged to attend appropriate external training events which will facilitate the undertaking of their duties.
Trustee Liability Insurance
The charity holds Trustee Liability insurance on behalf of its Trustees and Officers at a cost of £4,730 (2021/22: £2,918).
TRUSTEES’ RESPONSIBILITY IN RELATION TO THE FINANCIAL STATEMENTS
The charity Trustees are responsible for preparing a Trustees’ annual report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The financial statements are required by law to give a true and fair view of the state of affairs of the charity including the income and expenditure of the charity for that period. In preparing the financial statements the Trustees are required to: -
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select suitable accounting policies and then apply them consistently;
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observe the methods and principles in the Charities SORP;
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The CBSO Development Trust TRUSTEES’ REPORT for the year ended 5 April 2023
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make judgements and estimates that are reasonable and prudent;
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state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
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prepare the financial statements on the going concern basis unless it is inappropriate to assume that the charity will continue in operation.
The Trustees are responsible for keeping accounting records which are such as to disclose, with reasonable accuracy, the financial position of the charity at any time, and to enable them as Trustees to ensure that the financial statements comply with the Charity Act 2011, the applicable Charities (Accounts and Reports) Regulations, and the provisions of the Trust deed. The Trustees are also responsible for safeguarding the charity’s assets, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
This report was approved by the Trustees on 2 February 2024
By order of the Trustees
Chris Loughran
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AUDIT REPORT TO THE TRUSTEES OF THE CBSO DEVELOPMENT TRUST
The CBSO Development Trust
Opinion
We have audited the financial statements of CBSO Development Trust (the ‘charity’) for the year ended 5 April 2023 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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give a true and fair view of the state of the charity’s affairs as at 5 April 2023 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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have been prepared in accordance with the requirements of the Charities Act 2011.
In the previous accounting period the charity did not meet the requirements of Section 144(1) of the Charities Act 2011 and was therefore exempt from the requirements of Section 144(2) of the Act. Therefore, the prior period financial statements were not subject to audit.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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The CBSO Development Trust
AUDIT REPORT TO THE TRUSTEES OF THE CBSO DEVELOPMENT TRUST
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion:
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the information given in the Report of the Trustees is inconsistent in any material respect with the financial statements; or
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sufficient accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of trustees’ remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of trustees
As explained more fully in the Statement of Trustees’ responsibilities set out on page 7, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
We have been appointed as auditors under Section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other
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AUDIT REPORT TO THE TRUSTEES OF THE CBSO DEVELOPMENT TRUST
The CBSO Development Trust
laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the charity’s operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
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obtained an understanding of the nature of the sector, including the legal and regulatory frameworks that the charity operates in and how the charity is complying with the legal and regulatory frameworks;
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inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
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discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, Charities SORP (FRS 102), Charities Act 2011, the charity’s governing document, tax legislation and Charities (Protection and Social Investment) Act 2016. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing the financial statements including the Trustees’ Report, remaining alert to new or unusual transactions which may not be in accordance with the governing documents, inspecting correspondence with local tax authorities and evaluating advice received from external advisors.
The audit engagement team identified the risk of management override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and challenging judgments and estimates.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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AUDIT REPORT TO THE TRUSTEES OF THE CBSO DEVELOPMENT TRUST
The CBSO Development Trust
Use of our report
This report is made solely to the charity, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity for our audit work, for this report, or for the opinions we have formed.
Locke Williams Associates LLP Chartered Accountants Registered Auditors Blackthorn House St Pauls Square Birmingham B3 1RL
3 February 2024
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The CBSO Development Trust STATEMENT OF FINANCIAL ACTIVITIES
(including income and expenditure account) for the year ended 5 April 2023
| Unrestricted | Restricted | Endowment | Total | Total | ||
|---|---|---|---|---|---|---|
| Funds | Funds | Funds | Funds | Funds | ||
| 2023 | 2022 | |||||
| £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Notes | ||||||
| INCOME FROM: | ||||||
| Donations and Legacies | 2 | 12 | - | 2,849 | 2,861 | 108 |
| TOTAL INCOME | 12 | - | 2,849 | 2,861 | 108 | |
| EXPENDITURE ON: | ||||||
| Charitable Activities | 3 | 17 | 250 | 250 | 517 | 11 |
| Raising Funds: Investment | 4 | - | - | 16 | 16 | 168 |
| charges | ||||||
| TOTAL EXPENDITURE | 17 | 250 | 266 | 533 | 179 | |
| NET SURPLUS/ (DEFICIT) FOR THE | (5) | (250) | 2,583 | 2,328 | (71) | |
| YEAR BEFORE GAIN ON | ||||||
| INVESTMENTS | ||||||
| (LOSS)/GAIN ON INVESTMENTS | - | - | (168) | (168) | 383 | |
| NET MOVEMENT IN FUNDS | (5) | (250) | 2,415 | 2,160 | 312 | |
| RECONCILIATION OF FUNDS | ||||||
| Fund balances brought forward | 230 | 324 | 3,600 | 4,154 | 3,842 | |
| FUND BALANCES CARRIED | 225 | 74 | 6,015 | 6,314 | 4,154 | |
| FORWARD |
All income and expenditure and the resulting net movement in funds arise from continuing operations.
There are no recognised gains or losses other than the net movement in funds for the year.
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The CBSO Development Trust BALANCE SHEET As at 5 April 2023
Registered Charity No. 1042296
| Notes FIXED ASSETS Investments 6 CURRENT ASSETS Debtors 7 Cash at bank and in hand TOTAL CURRENT ASSETS CREDITORS: Amounts falling due within one year 8 NET CURRENT ASSETS TOTAL NET ASSETS THE FUNDS OF THE CHARITY Expendable Endowment Funds 9 Restricted Funds 10 Unrestricted Funds 11 TOTAL CHARITY FUNDS |
2023 2022 £’000 £’000 6,047 3,401 |
|---|---|
| 216 82 83 686 |
|
| 299 768 (32) (15) |
|
| 267 753 |
|
| 6,314 4,154 |
|
| 6,015 3,600 74 324 225 230 |
|
| 6,314 4,154 |
The financial statements on pages 15 to 25 were approved by the Trustees and authorised for issue on 2 February 2024 and are signed on their behalf by:
Chris Loughran
Trustee
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The CBSO Development Trust STATEMENT OF CASH FLOWS
For the year ended 5 April 2023
| CASH FLOWS FROM OPERATING ACTIVITIES: Cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Non-cash gifted assets Purchase of investment assets Net cash provided by (used in) investing activities Changes in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period RECONCILIATION OF NET INCOME/(EXPENDITURE) TO NET CASH FLOW FROM OPERATING ACTIVITIES Net income/(expenditure) for the reporting period Decrease/ (Increase) in debtors (Decrease)/ Increase in creditors Net cash provided by (used in) operating activities ANALYSIS OF CASH AND CASH EQUIVALENTS Cash Total cash and cash equivalents |
2023 2022 £’000 £’000 2,211 (60) (2,717) - (98) (25) |
|---|---|
| (2,815) (408) |
|
| (603) (85) 686 771 |
|
| 83 686 |
|
| 2,328 (71) (134) - 17 11 |
|
| 2,211 (60) |
|
| 83 686 |
|
| 83 686 |
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The CBSO Development Trust NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
1. ACCOUNTING POLICIES
General information
The CBSO Development Trust is a charitable trust established in England. It is governed by its Trust Deed.
The address of the charity’s registered office is CBSO Centre, Berkley Street, Birmingham, B1 2LF.
Basis of Accounting
The financial statements have been prepared in accordance with Accounting and Reporting by Charities Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2019) - (Charities SORP (FRS102)) and the Financial Reporting Standard applicable to the UK and Republic of Ireland (FRS102) and the Charities Act 2011.
CBSO Development Trust meets the definition of a public benefit entity under FRS102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.
The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are set out below:
Going concern
The Trustees have considered the impact of changes in the wider market and economy on investment values and have concluded that, given the ongoing robust investment management arrangements, the going concern basis remains appropriate for the preparation of these financial statements.
Whilst the level of grants it can make to the CBSO is based on the availability of investment funds the trustees consider that these will be adequate to meet it future objectives.
Bases and definition of income and expenditure
Income
-
Income from legacies is included in income when the charity is legally entitled to the income, the amount can be quantified with reasonable accuracy and receipt is probable.
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Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally on notification of the interest paid or payable by the bank.
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Endowment donations received are included when monies are received either directly or via the City of Birmingham Symphony Orchestra and allocated to the Endowment Fund.
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Other donations are recognised when monies are received.
Expenditure
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required, and the amount of the obligation can be measured reliably. Expenditure is classified under the following headings:
- Raising Funds comprises quarterly fees and other costs incurred in respect of the management of Endowment and other funds.
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The CBSO Development Trust NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
- Charitable activities include all related costs including governance costs and any grants paid to City of Birmingham Symphony Orchestra. Governance costs represent those costs incurred in the governance of the charity and its assets and include legal and professional charges.
Functional Currency
The financial statements are presented in sterling which is also the functional currency of the charity.
Funds
Restricted funds are funds which are to be used in accordance with specific restrictions imposed by the donors. There are three restricted funds which represent:
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Donations received and expenditure incurred for the building and upkeep of the CBSO Centre.
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A donation received to support the cost of the CBSO’s Music Director.
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A single donation received to support the CBSO’s centenary celebrations including the delayed tour to the USA in October 2022 (now fully released).
Endowment funds represent donations and grants held as a 25-year expendable Endowment under a Declaration of Trust with Arts Council England. The purpose of the Endowment is to support an annual innovation fund for the City of Birmingham Symphony Orchestra to deliver artistic, educational and operational projects.
Unrestricted funds are those which are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.
Investments
Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The Statement of Financial Activities includes the net gains and losses arising on revaluation and disposals throughout the year.
The charity does not invest directly in options or other complex financial instruments but does have exposure to derivatives and complex financial instruments that are used within the Partners Capital and Brewin Dolphin investment products to hedge against currency risk and help achieve the desired level of total risk.
Realised gains and losses
All gains and losses are taken to the Statement of Financial Activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value.
Realised and unrealised investment gains and losses are combined in the Statement of Financial Activities.
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The CBSO Development Trust NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
Financial Instruments
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measure at their settlement value.
Debtors
Debtors which are receivable within one year are initially recognised at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled and any impairment losses.
Trade creditors and Liabilities
Trade creditors payable within one year are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled.
Taxation
The activities of the charity are not subject to taxation and therefore no provision for taxation is required.
Critical accounting estimates and areas of judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors; including expectations of future events that are believed to be reasonable under the circumstances.
There are no critical accounting estimates and assumptions to report.
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The CBSO Development Trust NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
2. DONATIONS, LEGACIES AND GIFTS
| Restricted donations and gifts Unrestricted donations and gifts Endowment donations and gifts |
Total 2023 £’000 Total 2022 £’000 - - 12 75 2,849 33 |
|---|---|
| 2,861 108 |
There were no restricted donations (2021/22: nil).
Endowment donations were £nil (2021/22: £33,000) from individuals. During the year, the transfer in of the gift from the City of Birmingham Orchestra Endowment Fund (CBOEF) as part of the wind down process of the CBOEF was received in a value of £2,717,011 (2021/22: £nil).
In addition, a further legacy as a result of the wind down process of the CBOEF of £132,065 was received in January 2024.
There were unrestricted donations of £10,300 (2021/22: £75,000), which were received via the City of Birmingham Symphony Orchestra.
3. CHARITABLE ACTIVITIES
| Grants to CBSO: Fundraising Support Charitable activities Music Director Support Governance Costs: Audit Fees Independent Examiner Fees Legal & Professional Trustee Insurance |
Total 2023 £’000 Total 2022 £’000 - - 500 - - - |
|---|---|
| 500 - 7 - - 4 5 4 5 3 |
|
| 17 11 |
Total charitable activities expenditure of £516,581 (2021/22: £11,000); this includes Unrestricted funds of £16,581 (2021/22: £11,000), Restricted funds of £250,000 (2021/22: £nil) and Endowment
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The CBSO Development Trust NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
funds of £250,000 (2021/22: £nil). No political donations were made, nor any political expenditure incurred (2021/22: £nil).
4. INVESTMENT CHARGES
| Total 2023 | Total 2022 | |
|---|---|---|
| £’000 | £’000 | |
| Investment charges | 16 | 168 |
The investment charges in both years are attributed to Endowment funds.
5. STAFF COSTS AND TRUSTEE REMUNERATION
The charity has no employees.
The Trustees as a Board are the key management personnel and they all give their time and expertise freely without any form of remuneration or other benefits in cash or kind (2021/22: £nil). No Trustee received any reimbursement of expenses during the year (2021/22: £nil).
A Trustee indemnity insurance premium of £4,730 (2021/22: £2,918) was paid during the year.
6. INVESTMENTS
| At Market value Balance at 6 April Net purchases Transfer in Investment (losses)/gains Investment charges Balance at 5 April Historical cost of investments |
Total 2023 £’000 Total 2022 £’000 3,401 3,068 113 118 2,717 - (168) 383 (16) (168) |
|---|---|
| 6,047 3,401 |
|
| 4,691 2,165 |
All investments are carried at their fair values, based on the underlying fund Net Asset Values which in turn use the closing quoted market price.
Investments comprise monies held by both Partners Capital and Brewin Dolphin. For Partners Capital these were held in a Master Portfolio and Private Equity Funds; Condor XI, XII, XIII, XIV and XV. There were no additional investments into the Partners Capital Master Portfolio during the year. Capital calls/payments during the year into the Private Equity Fund Condor funds totalled £113,426 (2021/22: £118,000).
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The CBSO Development Trust NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
For Brewin Dolphin, these were held in UK and Overseas Bonds; UK, North American, European, Japanese, Asia Pacific and Emerging Markets Equities; Global investments; Absolute Return and Other investments; Property; Commodities, and Cash Products.
All of the losses/gains in both years are attributable to Endowment funds.
The main form of financial risk faced by the charity is that of volatility in financial and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities within particular sectors or sub sectors and other financial markets.
The charity manages these investment risks by retaining an expert manager and operating an investment policy that provides for a high degree of diversification.
An Investment Sub Committee monitors the performance of the investment manager, holding regular meetings and receiving quarterly performance reports which are circulated to all Trustees.
7. CURRENT ASSETS
| . CURRENT ASSETS | |
|---|---|
| Debtors Cash at bank |
Total 2023 £’000 Total 2022 £’000 216 82 83 686 |
| 299 768 |
Debtors were as follows: Unrestricted funds £75,367 (2021/22: £75,367), Restricted funds £nil (2021/22: £nil) and Endowment funds £140,625 (2021/22: £7,000).
Cash at bank balances were as follows: Unrestricted funds £179,604 (2021/22: £169,000), Restricted funds £74,173 (2021/22: £324,000) and Endowment funds (£171,064) (2021/22: £193,000).
8. CREDITORS: Amounts falling due within one year
| Other creditors | Total 2023 £’000 Total 2022 £’000 31 15 |
|---|---|
| 31 15 |
Creditors were as follows: Unrestricted funds £31,253 (2021/22: £15,000), Restricted funds £nil (2021/22: £nil) and Endowment funds £nil (2021/22: £nil).
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The CBSO Development Trust NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
9. EXPENDABLE ENDOWMENT FUNDS
| Balance brought forward Net incoming/(outgoing) resources Balance carried forward |
Total 2023 £’000 Total 2022 £’000 3,600 3,362 2,415 248 |
|---|---|
| 6,015 3,600 |
Endowment funds largely represents donations and grants held as a 25 year expendable Endowment under a Declaration of Trust with Arts Council England. The purpose of this Endowment fund is to support an annual innovation fund for the City of Birmingham Symphony Orchestra to deliver artistic, educational and operational projects. The charity has continued to receive endowment donations since the completion of the Arts Council Endowment Scheme in July 2015 and these funds will be used, in line with the donors’ wishes, to support the artistic and educational needs of the City of Birmingham Symphony Orchestra.
Annual grants are made from Endowment funds based on applications from the City of Birmingham Symphony Orchestra and in line with the terms of the Declaration of Trust/donors wishes. Grants totalling £250,000 (2021/22: £nil) were made to the CBSO during the year for artistic and educational activities.
10. RESTRICTED FUNDS
| CBSO Centre fund CBSO Music Director fund CBSO Centenary fund CBSO Centre fund CBSO Music Director fund CBSO Centenary fund |
6 April 2023 Donations received Grants made 5 April 2023 £’000 £’000 £’000 £’000 13 - - 13 61 - - 61 250 - (250) - |
|---|---|
| 324 - (250) 74 |
|
| 6 April 2021 Donations received Grants made 5 April 2022 £’000 £’000 £’000 £’000 13 - - 13 61 - - 61 250 - - 250 |
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The CBSO Development Trust NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
324 - - 324
Name of Restricted Fund Description, Nature and Purpose of the Fund
CBSO Centre fund The CBSO Centre fund represents donations received less expenditure made for the building and upkeep of the CBSO Centre. No grants were made during the year.
CBSO Music Director fund The CBSO Music Director fund represents a £250,000 pledge to support the CBSO’s Music Director over a 5- year period starting in September 2016. No grant was made in the year.
CBSO Centenary fund
The CBSO Centenary fund represents a pledge paid in two £125,000 instalments to support the orchestra’s centenary activities. This was fully released on completion of the replanned tour to the USA in October 2022.
11. UNRESTRICTED FUNDS
| Balance brought forward Net (outgoing)/incoming resources Balance carried forward |
Total 2023 £’000 Total 2022 £’000 230 166 (5) 64 |
|---|---|
| 225 230 |
The Unrestricted funds are available to be spent for the general objectives of the charity.
12. RELATED PARTY TRANSACTIONS
There have been no related party transactions during the year (2021/22: nil) that require disclosure.
13. CONTINGENT ASSET
A legacy receivable by CBOEF in the sum of £132,065 was included within assets transferred to CBSODT but was not received by CBSODT until January 2024. Any further transfer from CBOEF is contingent on the eventual resolution of the finances of CBOEF, which at the time of approval of these accounts, is not reliably measurable. As such, in accordance with the Charities SORP, no recognition of any further amounts has been made.
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