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2020-08-31-accounts

Docusign En¥ÈlopÈ ID". FCB1ABOA-44C149OB-A8CF-B328CCFOC48E ROYAL OPERA HOUSE The Royal Opera House Endowment Fund 2000 Trustees, report and financial statements Charity number 1089928 Year Ended 31 August 2020

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Contents

Trustees’ report 3
Statement of responsibilities of the Trustees of The Royal Opera House Endowment
Fund 2000 9
Independent auditor’s report to the Trustees of the Royal Opera House Endowment
Fund 2000 10
Statement of financial activities (including income and expenditure account and
statement of total recognised gains and losses) 13
Balance sheet 14
Notes to the financial statements 15

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Trustees’ report

The trustees present their report together with the audited accounts for the year ended 31 August 2020. These accounts and annual returns will be filed with the Charity Commission.

Reference and administrative details of the charity, its trustees and advisors

Charity Number 1089928
Principal Office Royal Opera House, Covent Garden, London, WC2E 9DD
Auditors Grant Thornton UK LLP
Grant Thornton House
30 Finsbury Square
London
EC2A 1AG
Bankers Coutts and Co
440 Strand
London
WC2R 0QS
Solicitors Farrer & Co LLP
66 Lincoln's Inn Fields
London
WC2A 3LH
Investment Managers Stonehage Fleming Investment Management Limited
15 Suffolk Street
London SW1Y 4HG
Troy Asset Management Limited
Brookfield House
33 Davies Street
London W1K 4BP
Newton Investment Management Limited
BNY Mellon Centre
160 Queen Victoria Street
London EC4V 4LA
Trustees Dame Vivien Duffield (Chairman) (Royal Opera House Trustee)
Tim Bunting (Royal Opera House Trustee)
Hamish Forsyth (Independent Trustee)
Sir Simon Robertson (Independent Trustee, retired 20 April 2020)
Sir Simon Robey (Deputy Chairman)
Baroness Shackleton of Belgravia (Independent Trustee, retired 20
April 2020)
Peter Troughton CBE (Independent Trustee)
Secretary to the trustees Ivan Daffern (retired 16 March 2020)

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Structure, governance and management

Governing document

The Royal Opera House Endowment Fund 2000, (‘the Charity’), was established by trust deed on 14 December 2001 and is a registered charity number 1089928.

Appointment and training of trustees

The trustees who have served wholly or partly during the year are set out on the previous page. The appointment of new trustees is vested in the existing trustees who shall consult the Royal Opera House before any appointment. The trustees shall ensure that only two of the trustees are directors of Royal Opera House Covent Garden Foundation, (‘ROHCGF’ or ‘the Royal Opera House’) and that no employee of ROHCGF is appointed a trustee. There shall be not less than five nor more than eight trustees of the Charity.

Trustees hold office for an initial term not exceeding three years and are eligible for reappointment for further terms not exceeding three years, but may resign as trustee before the expiry of any term by notice in writing to the trustees.

The trustees appoint one of their number as the chairman of the trustees.

New trustees undergo an induction session with the secretary to the trustees to brief them on their obligations under charity law, the content of the trust deed, and the conduct of trustee meetings.

Organisation

The direction and control of the Charity is determined by the trustees, who meet at least twice a year. As set out in the Charity SORP, the trustees are the key management personnel with oversight of the management and activities of the Charity. They receive no compensation. Day to day management and administration of the Charity is delegated to Alex Beard (Chief Executive Officer of the Royal Opera House), who attends the trustee meetings.

Connected charities and companies

ROHCGF (‘the Royal Opera House’) – registered charity no. 211775. The Charity holds investments and generates income to grant to the ROHCGF. The principal activity of the ROHCGF is the presentation of opera and ballet performances at the Royal Opera House and tours in the United Kingdom and overseas. The power of appointing new trustees of the Charity is vested in the trustees who consult ROHCGF before any exercise of this power. The trustees ensure that only two of the trustees are ROHCGF trustees and that no employee of ROHCGF is appointed a trustee.

ROH Holdings Ltd – registered company no. 02580395. This is a holding company with one subsidiary, ROH Developments Limited, a property development company.

Royal Opera House Enterprises Limited – registered company no. 04112266. This is a subsidiary of ROHCGF.

Going Concern

The Trustees must satisfy themselves as to the Charity’s ability to continue as a going concern for a minimum of 12 months from the signing of the financial statements. From the beginning of the pandemic the Trustees have monitored the general economic impact of Covid-19, in particular the impact on investment markets. Although investment markets had initially been adversely affected at the start of the pandemic in March 2020 they have since recovered. The Trustees continue to work closely with the investment managers to ensure funds are invested as effectively as possible to minimise exposure to risk during this uncertain time. As the Charity

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holds endowments and other funds of £47m, the Trustees feel there is little risk of the Charity not being able to continue in operational existence for the foreseeable future and for this reason the financial statements have been prepared on a going concern basis.

Risk Management

The trustees have examined the major strategic and operational risks that face the Charity and are satisfied there are systems in place to mitigate identified risks. The trustees have received assurances from the Audit Committee of ROHCGF of the effectiveness of the internal controls. The main risks identified relate to the Covid-19 pandemic and the state of the UK economy, which have a direct impact on investment values and fundraising generally. The performance of investments is key to creating income that can be granted to the ROHCGF in the furtherance of its charitable objects. The trustees manage this risk by regularly meeting with the Investment Managers and by scrutinising regular updates and presentations from the Investment Managers to understand the risk profile of the investments. Annually, the trustees review the risk register for the Charity.

Objects and activities

The objects of the Charity are to promote the education of the public in the arts of opera and ballet by making grants to, or for the benefit of, the Royal Opera House. The Charity does this by seeking to increase its capital base by actively marketing the Charity as a recipient of legacy income and other gifts. The Charity also generates capital growth and income in order to make grants to the Royal Opera House.

The ROHCGF aims to enrich people’s lives through opera and ballet. Home to two of the world’s great artistic companies – The Royal Opera and The Royal Ballet, performing with the Orchestra of the Royal Opera House – it seeks to be accessible to audiences across the UK and to break new ground in the presentation of lyric theatre.

Despite a challenging year due to the pandemic, the Royal Opera House is one of the busiest theatres in the world, delivering over 281 performances, employing more than 1,000 staff and generating a turnover of over £117m. In turn this enabled over 390,000 attendances at the Royal Opera House and over 500,000 in cinemas worldwide in 2019/20, further extended via broadcasting, digital activity and collaboration with touring companies. In addition, more than 1,500 schools took part in learning and participation projects.

From workshops in schools to formal apprenticeships, community projects to teacher training, the Royal Opera House deepened the knowledge and experience of thousands of people last year, including through its extensive participatory programme in Thurrock and the Thames Gateway.

The Royal Opera House’s achievements, supported by the Charity, are detailed in the Royal Opera House Trustees’ report and financial statements for 2019/20.

Public Benefit

The Charity delivers public benefit by making grants each year to the Royal Opera House. The Trustees of the Royal Opera House refer to the Charity Commission’s general guidance on public benefit when shaping and reviewing the ROHCGF charity’s aims, objects and future strategies. In setting the level of ticket prices, charges and concessions, and in developing digital and broadcast distribution, the Royal Opera House Trustees give careful consideration to the accessibility of the Royal Opera House to those on low incomes. This is addressed through maintaining a wide range of ticket prices, as well as through several ticket subsidy

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schemes, free events, Big Screens, cinema, live streaming, digital and broadcast activity and an extensive learning and participation programme.

Grant making policy

The Charity comprises a number of separate funds. It determines the funding of projects which accord with their objects and which benefit the Royal Opera House. Each fund has a specific purpose:

Achievements and performance

During the year the Charity made grants of £2,254,000 ( Year ended 31 August 2019: £2,421,134 ) to the Royal Opera House. The grants made were as follows:

Productions £644,500

Education and Apprenticeships £539,000:

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Other £1,070,500:

The investment managers, Stonehage Fleming Investment Management Limited, Troy Asset Management Limited and Newton Investment Management Limited, achieved a combined capital growth and income return net of investment management fees of 0.79% for the year ended 31 August 2020 ( Year ended 31 August 2019 7.07%). The return for 2020 did not exceed the blended target of CPI plus 3.5% (3.7%). Investments with Stonehage Fleming which are long term in nature are being progressively wound down.

Financial review

Grants totalling £2,254,000 ( Year ended 31 August 2019 £2,421,134 ) were made to the ROHCGF in furtherance of the Charity’s objects. Other resources expended related primarily to the management of investments, and the marketing of the Charity as a beneficiary of legacy income for the benefit of the Royal Opera House. The investment managers’ fees were £261,111 ( Year ended 31 August 2019 £255,477 ).

The total funds at 31 August 2020 were £47.1m ( Year ended 31 August 2019 £48.1m ). The net decrease in funds for the year as set out in the statement of financial activities was £1,011,638 ( Year ended 31 August 2019: increase of £2,927,668 ), comprising net outgoing resources of £779,514 and net realised and unrealised losses of £232,124 on investments held with investment managers. Funds held with investment managers at the end of the year were £38,584,294 ( 2019: £39,149,090 ) including cash holdings with investment managers of £7,170,929 ( 2019: £4,139,535 ) disclosed under Fixed Assets. Additional cash balances at the bank at the end of the year were £2,797,495 (2019: £4,339,933).

Investment powers and policy

There are no restrictions on the investment powers of the trustees. The trustees are permitted to invest and reinvest the trust fund, providing the objects and purposes of the Charity are met, and subject to such consents as may be required by law.

Investment Policy

The Trustees reviewed and agreed an Investment Policy in line with the Charities Commission Guidance CC14. A summary of the key investment objects are as follows:

To achieve the above objects the trustees have set the investment benchmark of a blended total return of CPI +3.5% on a rolling basis, (net income 1.5% and capital return of CPI +2%).

Reserves policy

The trustees have reviewed the free reserves (comprising unrestricted net current assets) of the Charity which are £526,524 at 31 August 2020 ( 31 August 2019: £657,431 ). Free reserves are intended to give the Charity financial flexibility and a buffer against operational risks. Having considered the Charity’s commitments with regard to the sensitivity of investment returns in the economic climate, the trustees have considered the level of free reserves and

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believe total reserves are at an appropriate level at the year ended 31 August 2020. The aim has been to build up free reserves to ensure that grants can be made to the Royal Opera House in future years even if investment income underperforms.

Trustees and trustees’ interests

No Trustee received any remuneration for his or her services or was reimbursed for out of pocket expenses, nor was the Charity involved with any contracts or transactions in which any trustee had a material interest.

Plans for future periods

The Charity seeks to increase its capital base by actively marketing the Charity as the recipient of legacy and philanthropic income pledged in support of the Royal Opera House and by achieving capital growth and income return in line with or in excess of investment objects. Grant applications will continue to be considered for the funding of projects which benefit the Royal Opera House which are consistent with the Charity Commission’s guidelines on public benefit.

Auditors

The trustees who held office at the date of approval of this trustees’ report confirm that, so far as they are each aware, there is no relevant audit information of which the Charity’s auditors are unaware; and each trustee has taken all the steps that he/she ought to have taken as a trustee to make himself / herself aware of any relevant audit information and to establish that the Charity’s auditors are aware of that information.

On behalf of the trustees

Dame Vivien Duffield Trustee Approved on 25 May 2021

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Statement of trustees’ responsibilities

The trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and regulations.

The Charities Act 2011 requires the trustees to prepare financial statements for each financial year. The trustees have to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland. The trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charity for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. 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.

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Independent auditor’s report to the trustees of The Royal Opera House Endowment Fund 2000

Opinion

We have audited the financial statements of The Royal Opera House Endowment Fund 2000 (the ‘charity’) for the year ended 31 August 2020, which comprise the Statement of Financial Activities, the Balance Sheet and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:

Basis for opinion

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with regulations made under section 154 of that Act. 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.

The impact of macro-economic uncertainties on our audit

Our audit of the financial statements requires us to obtain an understanding of all relevant uncertainties, including those arising as a consequence of the effects of macro-economic uncertainties such as Covid-19 and Brexit. All audits assess and challenge the reasonableness of estimates made by the trustees and the related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and the charity’s future prospects and performance.

Covid-19 and Brexit are amongst the most significant economic events currently faced by the UK, and at the date of this report their effects are subject to unprecedented levels of uncertainty, with the full range of possible outcomes and their impacts unknown. We applied a standardised firm-wide approach in response to these uncertainties when assessing the charity’s future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a charity associated with these particular events.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

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In our evaluation of the Trustees' conclusions, we considered the risks associated with the charity's business, including effects arising from macro-economic uncertainties such as Covid19 and Brexit, and analysed how those risks might affect the charity's financial resources or ability to continue operations over the period of at least twelve months from the date when the financial statements are authorised for issue. In accordance with the above, we have nothing to report in these respects.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee that the charity will continue in operation.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Trustees’ Report and Financial Statements, other than the financial statements and our auditor’s report thereon. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 Act 2011 requires us to report to you if, in our opinion:

Responsibilities of trustees for the financial statements

As explained more fully in the Statement of Trustees' Responsibilities set out on page 9, the trustees are responsible for the preparation of the financial statements which 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

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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

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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charity's trustees, as a body, in accordance with Section 154 of the Charities Act 2011. Our audit work has been undertaken so that we might state to the charity's trustees 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 and its trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Grant Thornton UK LLP Statutory Auditor, Chartered Accountants Sheffield 25[th] May 2021

Grant Thornton UK LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Statement of financial activities for the year ended 31 August 2020

2020 2019
Restricted
Unrestricted
(Income)
£
£
Income and endowments from:
Donations and legacies
2
- -
Investment
3
670,437
463,182
_
_________
Total incoming
670,437
463,182
_
_
Expenditure on:
Charitable activities
Grants to Royal Opera House Covent
Garden Foundation
4_
(677,000)
(1,124,490)
Raising funds
Raising donations and legacies
5
(18,482)
-
Investment managers’ fees
(105,863)
(155,248)
______
__
Total expenditure
(801,345)
(1,279,738)
__
_
Net gains on investments
_6
- 155,913
_
_________
Net (expenditure) / income
(130,908)
(660,643)
Net movement in funds
(130,908)
(660,643)
Fund balances brought forward at
1 September 2019
12;13_
657,432
3,834,812
______
___
Fund balances carried forward at
31 August 2020
12;13
526,524
3,174,169


Note		 Restricted
(Capital)
£
620,441
19
_
620,460
_
(452,510)
-
-
_
(452,510)
__
(388,037)
_
(220,087)
(220,087)
43,647,486
_____
43,427,399
 Total
£
620,441
1,133,638
_
1,754,079
_
(2,254,000)

(18,482)

(261,111)
__
(2,533,593)
_
(232,124)

__
(1,011,638)

(1,011,638)

48,139,730
_
47,128,092
Total
£
2,357,210
1,481,756
_
3,838,966
_
(2,421,134)
(27,073)
(255,477)
_
(2,703,684)
__
1,792,386
_
2,927,668
2,927,668
45,212,062
___
48,139,730
~~__~~ ~~__~~ ~~____~~ ~~____~~ ~~__~~

Incoming resources arise from continuing operations.

The Charity had no recognised gains or losses other than the net movement in funds for the year.

The notes on pages 15 to 26 form part of these financial statements.

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Balance sheet as at 31 August 2020

Fixed assets
Investments
9


Current assets
Debtors amounts falling due after
more than one year
10

Debtors amounts falling due within
one year
10
Cash at bank


Total current assets


Creditors:amounts falling due within
one year
11

Net current assets


Net assets

Unrestricted
12

Restricted (Income)
12

Restricted (Capital)
12


Funds
12;13

Note		 2020
£
38,584,294
__

5,430,000

417,776
2,797,495
_

8,645,271
__

(101,473)
_

8,543,798
__

47,128,092
~~_~~
526,524
3,174,169

43,427,399
_

47,128,092
~~~~		 2019
£
39,149,090
__
5,430,000
1,459,904
4,339,933
_
11,229,837
__
(2,239,197)
_
8,990,640
__
48,139,730
~~_~~
657,432
3,834,812
43,647,486
_
48,139,730
~~~~

These financial statements were approved on 25 May 2021 by:

Dame Vivien Duffield Trustee

The notes on pages 15 to 26 form part of these financial statements.

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Notes

(forming part of the financial statements)

1 Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Charity’s financial statements.

Basis of preparation

The financial statements are prepared in accordance with the FRS102 applicable accounting standards and the Charities Act 2011. They have been prepared under the historical cost convention, modified to include the revaluation of fixed asset investments. The Charity has adopted the Statement of Recommended Practice “Accounting and Reporting by Charities” applicable to charities preparing their accounts in accordance with the Financial Reporting Standard in the UK and Republic of Ireland (FRS102) (effective 1 January 2019). There are no material departures from FRS102.

The Charity meets the definition of a qualifying entity under FRS102 as the results of the Charity are consolidated into the ROHCGF's financial statements which are publicly available. In accordance with FRS 102 S1.12, the Charity has taken advantage of the exemptions in respect of the preparation of a cash flow statement and the disclosure of financial instruments.

The Charity was established by trust deed in the United Kingdom on 14 December 2001 and is a registered charity number 1089928. The charity is registered in England and its principal address is Royal Opera House, Covent Garden, London, WC2E 9DD.

Going Concern

The Trustees consider that the going concern assumption is an appropriate basis on which to prepare these financial statements. After considering the risks associated with the economic impact of the pandemic (as set out within the heading Going Concern on pages 4 to 5) the Trustees consider the Charity has adequate resources to continue in operational existence for the foreseeable future being a minimum of twelve months from the date of the approval of these financial statements. For this reason, the financial statements have been prepared on a going concern basis.

Public Benefit

The Charity delivers public benefit by making grants on an annual basis to Royal Opera House Covent Garden Foundation, (‘ROHCGF’ or ‘the Royal Opera House’). The Charity is a public benefit entity under FRS102.

Significant judgements and key sources of estimation uncertainty

Management have exercised their judgement in determining that the fair value of the leased commercial units at the inception of the leasing arrangement amounts to the initial payments paid by the third party and the present value of rent receipts over the term of the lease and determining that the residual value of the leased units at the end of the lease term is negligible when discounted to present value. See Note 10 for carrying values for the current and prior periods.

Fixed asset investments

Investments are shown at fair value as at the balance sheet date. Realised and unrealised gains on investments are recognised in the statement of financial activities, and are treated as attributable to Restricted Capital funds.

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Finance leases

Finance leases are leases in which substantially all the risks and rewards of ownership, other than legal title, are transferred to the lessee. Assets acquired and held for use under finance leases are presented as a debtor at an amount equal to the net investment in the lease. Finance income is subsequently recognised at a constant periodic rate of return on that net investment. Contingent rentals arising under finance leases are recognised on receipt.

Fund accounting

Unrestricted funds may be used in accordance with the charitable objects at the discretion of the trustees.

Restricted funds are to be used in accordance with the object of the Charity and specific restrictions placed by the donor.

Restricted funds have been further subdivided into restricted (capital) funds and restricted (income) funds. Restricted (capital) funds (also known as endowment funds) represent those assets that are required to be invested. These funds include both permanent restricted (capital) funds, where there is no power to convert the capital into income and the funds are required to be held permanently by the Charity, and expendable restricted (capital) funds where the trustees have the power to convert the capital into expendable income. Restricted (capital) funds are invested to produce income to meet expenditure, as directed by the terms of the endowment or by the terms of the Charity.

Restricted (income) funds are expendable at the discretion of the trustees on specific purposes as required by donors.

Functional Currency

The Charity operates primarily in the UK and the functional currency as well as the reporting currency is the pound sterling.

Income

Income is recognised only when it is probable that the economic benefits associated with the transaction will flow to the charity and the amount of the revenue can be measured reliably. Investment income is recognised on an accruals basis. Specifically, interest is recognised using the effective interest method and dividend income is recognised when the right to receive payment is established. Income from grants, donations and legacies is accounted for when the receipt is probable, there is evidence of entitlement and can be measured reliably. Entitlement is assessed using performance and time-restriction conditions.

Charitable expenditure

Expenditure is included on an accruals basis. Grants are recognised in the financial year in which the production or activity takes place.

Cash at bank and in hand

Cash at bank includes cash equivalents which are defined as short term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Assets

Assets are resources which are controlled by the company as a result of a past event, from which future economic benefits are expected to flow to the company. Assets are recognised only when it is probable that future economic benefits will flow to the company when the item has a cost or value that can be measured reliably.

Debtors

Debtors fall into the definition of assets and encompass trade debtors, accrued income, prepayments and intra-group balances. Debtors are measured at the cost of the transaction where receipt is not deferred beyond normal terms. Where receipt is deferred beyond normal terms, the debtor is measured at the present value of the future receipts discounted at a market rate of interest for a similar debt instrument. In both instances, measurement is net of provision for doubtful debts.

Liabilities

Liabilities arise when there is a present obligation (legal or constructive) as a result of a past event, from which future economic benefits are expected to flow to the supplier or counterparty. Liabilities are recognised only when it is probable that future economic benefits will flow to the supplier or counterparty and when the item has a cost or value that can be measured reliably. Contracted commitments are not recorded as liabilities on the balance sheet, as the criteria for recognition have not been met. Commitments are disclosed in note 14.

Creditors

Creditors fall into the definition of liabilities and encompass trade creditors, accruals for costs not yet billed or processed, deferred income and intra-group balances. Creditors are measured at the cost of the transaction where payment is not deferred beyond normal terms. Where payment is deferred beyond normal terms, the creditor is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

2 Donations and legacies

Permanent
endowment
Expendable
endowment
£
£
Legacies
619,781
-
Other donations
660
-
_
_
620,441
-		 Total
Permanent
endowment
Expendable
endowment
£

619,781
2,357,010
-

660
200
-
_
_
___

620,441
2,357,210
-
2020		 Total
£
2,357,010

200
___
2,357,210
2019

Donations and legacies are directed to support and grow the capital in the Charity unless otherwise directed by the donor. The Trustees have declared a legal trust over these incoming resources to invest and hold these funds as restricted capital funds.

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

3 Investment income

Investment income
2020
£		 2019
£
Finance lease interest income
Contingent rents
Dividend and interest income		 270,202
52,972
810,464
___
1,133,638		 270,204
65,898
1,145,654
___
1,481,756

Dividend and interest income is earned on funds managed by the Investment Managers and interest on bank deposits held at Coutts and Co. Finance lease interest income and contingent rents are derived from leases for the retail units on the site of the Royal Opera House.

4 Grants

During the year the Charity made grants of £2,254,000 ( 2019: £2,421,134 ) to the Royal Opera House in support of the following productions/projects:

Nightly Cast Sheets
Otello
Madama Butterfly
Death in Venice
La Boheme
The Sleeping Beauty
Coppelia
Swan Lake
Concerto/Enigma Variations/Raymonda Act III
Abaya and Aisha
Manon
Onegin
Music Library
Education projects
Chance to Dance Education Project
Healthcare Suite
Derek Butler Apprentices
Susan Olde Music Director Fund		 Unrestricted
(Income)
Restricted
(Income)
Restricted
(Capital)
Restricted
(Capital)
Restricted
(Capital)
Total
Permanent
Expendable
Total
£
£
£
£
£
£
80,000
- - - -
80,000
45,563
- - - -
45,563
45,563
- - - -
45,563
45,563
- - - -
45,563
45,563
- - - -
45,563
45,562
- - - -
45,562
45,562
- - - -
45,562
45,562
- - - -
45,562
45,562
- - - -
45,562
50,000
- - - -
50,000
- 50,143
-
119,857
119,857
170,000
- 46,048
- 13,952 13,952
60,000
150,000
- - - -
150,000
- 182,182 - 161,818 161,818
344,000
25,000
- - - -
25,000
7,500
- - - -
7,500
- 13,117
-
156,883
156,883
170,000
- 833,000
- - -
833,000
677,000 1,124,490
-
452,510
452,510
2,254,000

5 Expenditure on raising donations and legacies

Marketing and publicity
Ground rent		 2020
£
13,482
5,000
__
18,482		 2019
£
22,073
5,000
___
27,073

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

6 Gains and losses on revaluations and disposals of investments

Realised gains on disposal of investments
Unrealised (loss)/gain on revaluation of other investments
 2020
£
1,758,513
(1,990,637)
____
(232,124)		 2019
£
1,295,720
496,666
__
1,792,386

During the year there were losses on investments totalling £232,124 ( 2019: gains of £1,792,386 ). Of this £1,990,637 relates to unrealised losses primarily due to negative movements in the fair value of the investments held by Troy and Newton, and £1,758,513 relates to realised gains mainly on the disposal of investments transferring funds from the Trojan Income Fund to the Trojan Fund.

Realised gains on investments are classified as ‘Restricted Capital’ within the Statement of financial activities, as they were immediately reinvested within the investment portfolio and were not available to be utilised at the discretion of the trustees.

7

Trustees’ remuneration

Trustees received no remuneration and were paid no expenses during the year ( 2019: nil). The Charity does not have any employees.

8 Taxation

The Charity is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable trust for UK income tax purposes. Accordingly, the Charity is exempt from taxation in respect of income or capital gains received within categories covered by Part 10 Income Tax Act 2007 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

Due to the high value of non-business and exempt activities, the Charity is unable to recover any tax on many of its purchases. All non-recoverable VAT is included within the appropriate expenditure headings.

9 Fixed asset investments

Fixed asset investments
2020
£		 2019
£
Held with investment managers:
- Venture funds
- Quoted equities

- Hedge funds
- Bonds
- Cash funds
- Gold		 357,844
18,381,626
290,958
8,882,125
7,170,929
3,500,812		 340,254
24,331,582
526,574
7,999,825
4,139,535
1,811,320
Total investments with Investment Managers ____ ____
38,584,294 39,149,090

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

The movements in investments held with investment managers were as follows:

Market value at beginning of the period
Additions (at cost)
Disposals (at opening market value)
Net realised and unrealised investment gains
Market value at end of the period
Historical cost at end of the period		 Market value at beginning of the period
Additions (at cost)
Disposals (at opening market value)
Net realised and unrealised investment gains
Market value at end of the period
Historical cost at end of the period		 Market value at beginning of the period
Additions (at cost)
Disposals (at opening market value)
Net realised and unrealised investment gains
Market value at end of the period
Historical cost at end of the period		 2020 2020 2020 2019 2019 2019
Listed
investments
Other
investments
Total
investments
£
£
£
38,009,188
1,139,902
39,149,090
1,997,328
-
1,997,328
(1,980,000)
(350,000)
(2,330,000)
(208,878)
(23,246)
(232,124)		 Listed
investments
Other
investments
Total
investments
£
£
£
35,555,352
1,090,088
36,645,440
997,179
-
997,179
(285,915)
-
(285,915)
1,742,572
49,814
1,792,386
37,817,638
766,656
38,584,294		 38,009,188
1,139,902
39,149,090
32,568,997
761,414
33,330,411		 28,908,834
761,414
29,670,248
Split of investments between those based in the UK and those that are based overseas:
All Equities
Bonds
Alternative
Investments*
Cash
Gold		 UK
£
5,619,701
3,630,907
648,802
7,170,929
3,500,812		 Overseas
£
12,761,925
5,251,218
-
-
-		 Total
£
18,381,626
8,882,125
648,802
7,170,929

3,500,812

2020		 UK
£
15,069,603
2,565,865
866,828

4,139,535

1,811,320
 Overseas
£
9,261,979
5,433,960
-
-
-		 Total
£
24,331,582
7,999,825

866,828

4,139,535

1,811,320
2019
____ ____ ____ ____ ____ ____
20,571,151 18,013,143 38,584,294
 24,453,151 14,695,939 39,149,090

Split of investments between those based in the UK and those that are based overseas:

*Alternative investments includes Hedge Funds, Commodities, Property, Special Situations LLPs, Infrastructure and Currency Options.

10 Debtors

Debtors: amounts falling due after more than one year
Finance lease rental income
Debtors: amounts falling due within one year
Finance lease rental income due within one year
Investment income receivable
Accrued income
 2020
£
5,430,000
___
5,430,000
322,972
94,804
-
___
417,776		 2019
£
5,430,000
___
5,430,000
335,898
254,056
869,950
___
1,459,904

The 5% income interest in the leases of the retail units on the site of the Royal Opera House is accounted for as a finance lease debtor and therefore held at an historic valuation which in total is £5.7m. The property valuation undertaken by Gerald Eve LLP on 19 September 2019 deemed the fair value of this asset to be £11.75m.

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Gross investment in a finance lease at the end of the period

Unearned finance income for the period
Present value of minimum lease payments at the end of the period		 2020
£
59,782,000
(54,082,000)
_____
5,700,000		 2019
£
60,056,000
(54,356,000)
_____
5,700,000

The expected maturity of the gross investment in a lease and present value of the minimum lease payments receivable is as follows:

£
£
Not later than one year
270,000
258,000
Later than one year and not later than five years
1,081,000
922,000
Later than five years
58,431,000
4,520,000
__
__
59,782,000
5,700,000
Gross
investment
in a finance
lease
Present value
of minimum
lease
payments		 £
£
Not later than one year
270,000
258,000
Later than one year and not later than five years
1,081,000
922,000
Later than five years
58,431,000
4,520,000
__
__
59,782,000
5,700,000
Gross
investment
in a finance
lease
Present value
of minimum
lease
payments		 £
£
Not later than one year
270,000
258,000
Later than one year and not later than five years
1,081,000
922,000
Later than five years
58,431,000
4,520,000
__
__
59,782,000
5,700,000
Gross
investment
in a finance
lease
Present value
of minimum
lease
payments

11 Creditors: amounts falling due within one year

2020
£		 2019
£
Amounts owing to Royal Opera House Covent Garden Foundation
Amounts owing to ROH Holdings Limited
Deferred rental income		 63,464

5,000

19,499
 2,196,188
10,000
19,499
Other creditors
 13,510
__
101,473		 13,510
__
2,239,197

12 Analysis of net assets between funds

Investments Cash at bank
and in hand
£
£
Unrestricted Funds
- 1,768,437
Restricted Income Fund
- 1,029,058
Restricted Capital Fund
38,584,294
-
__ __
At 31 August 2020
38,584,294
2,797,495		 Other net
current
assets
£
(1,241,913)
2,145,111
4,843,105
_____
5,746,303		 Total
£
526,524
3,174,169
43,427,399
_____
47,128,092

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Analysis of net assets between funds (at 31 August 2019)

Investments Cash at bank
and in hand
£
£
Unrestricted Funds
- 2,097,232
Restricted Income Fund
- 2,242,701
Restricted Capital Fund
39,149,090
-
__ __
At 31 August 2019
39,149,090
4,339,933		 Other net
current
assets
£
(1,439,800)
1,592,111
4,498,396
_____
4,650,707		 Total
£
657,432
3,834,812
43,647,486
_____
48,139,730

13 Funds

At 1 September 2019
Incoming resources
Resources expended
At 31 August 2020
Gains on revaluations &
disposals of
investments		 Unrestricted Restricted
(Income)		 Restricted
(Income)
Main
Endowment
Fund
£
657,432
670,437
(801,345)
-


Jean
Sainsbury
Fund
Paul
Hamlyn
Fund
Franklin
Fund
Derek
Butler Trust
Fund
Paul
Ferguson
Memorial
Fund
Susan A.
Olde OBE
Music
Director Fund

£
£
£
£
£
£
-
189,698
- - -
3,645,114
73,139
275,879
1
19,970
57,788
36,405
(73,139)
(275,879)
(1)
(19,970)
(57,788)
(852,961)
- - - - - 155,913
526,524 -
189,698
---
2,984,471
At 1 September 2019
Incoming resources
Resources expended
Gains on revaluations &
disposals of
investments
At 31 August 2020		 Restricted
(Capital)		 Total
Main
Endowment
Fund
Jean
Sainsbury
Fund
Paul
Hamlyn
Fund
Franklin
Fund
Derek
Butler Trust
Fund
Paul
Ferguson
Memorial
Fund
£
£
£
£
£
£
23,200,846
3,524,423
13,760,559
561
1,026,885
2,134,212
620,441
- -
19
- -
-
(119,857)
(161,818)
-
(156,883)
(13,952)

(137,059)
(42,983)
(88,035)
(70)
(1,065)
(118,825)




£
48,139,730

1,754,079
(2,533,593)
(232,124)
23,684,228
3,361,583
13,510,706
510
868,937
2,001,435		 47,128,092

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Main Endowment Fund is the Trust Fund as defined in the Charity’s Trust Deed.

The above disclosure demonstrates the source of the Charity’s funds.

Restricted funds currently represent:

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

Funds (as at 31 August 2019)

At 1 September 2018
Incoming resources
Resources expended
At 31 August 2019
Gains on revaluations &
disposals of investments		 Unrestricted Restricted
(Income)		 Restricted
(Income)
Main
Endowment
Fund
£
701,572
806,220
(850,360)
-


Jean
Sainsbury
Fund
Paul Hamlyn
Fund
Franklin
Fund
Derek
Butler Trust
Fund
Paul
Ferguson
Memorial
Fund
Susan Olde
A. Olde OBE
Music
Director
Fund

£
£
£
£
£
£
-
189,698
- - -
4,252,297
109,667
422,566
4
29,674
68,679
44,927
(109,667)
(422,566)
(4)
(29,674)
(68,679)
(851,039)
- - - - - 198,929
657,432 -
189,698
---
3,645,114
At 1 September 2018
Incoming resources
Resources expended
Gains on revaluations &
disposals of investments
At 31 August 2019		 Restricted
(Capital)		 Total
Main
Endowment
Fund
Jean
Sainsbury
Fund
Paul Hamlyn
Fund
Franklin
Fund
Derek
Butler Trust
Fund
Paul
Ferguson
Memorial
Fund
£
£
£
£
£
£
20,173,683
3,452,232
13,274,002
764
1,128,751
2,039,063
2,357,209
- -
20
- -
-
(84,230)
(142,345)
-
(141,609)
(3,511)
669,954
156,421
628,902
(223)
39,743
98,660




£
45,212,062

3,838,966
(2,703,684)
1,792,386
23,200,846
3,524,423
13,760,559
561
1,026,885
2,134,212		 48,139,730

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

14 Commitments

The Charity has no capital commitments as at 31 August 2020 (2019: nil).

The Charity has commitments for future minimum lease payments under a non-cancellable operating lease as follows:

The future minimum lease payments under the non-cancellable operating lease is as follows: The future minimum lease payments under the non-cancellable operating lease is as follows:
2020 2019
£ £
Not later than one year 5,000 5,000
Later than one year and not later than five years 20,000 20,000
Later than five years 1,081,235 1,086,235

The lease payments payable are guaranteed at the greater of a minimum annual amount of £5,000 throughout the life of the long lease (expiry in December 2241) and 0.5% of 5% of the rents collected in an associated lease, held by the Charity. However, at the balance sheet date, the trustees consider this potential increased lease payments receivable to be so remote that the guaranteed minimum annual payments is recognised on a straight line basis over the lease. £5,000 was recognised as an expense during the year ended 31 August 2020 (2019: £5,000).

15 Transactions with trustees, connected persons, connected Charities and other related parties

Connected Charities

(a) Royal Opera House Covent Garden Foundation – registered charity no. 211775 and registered company no. 480523

The principal activity of the ROHCGF is to promote and assist in the advancement of education so far as such promotion and assistance shall be of a charitable nature and in particular, to raise the artistic taste of the country, and to procure and increase the appreciation and understanding of the musical art in all its forms. The power of appointing new trustees of the Charity is vested in the trustees who consult ROHCGF before any exercise of this power. The trustees ensure that only two of the trustees are ROHCGF trustees and that no employee of ROHCGF is appointed a trustee.

Grants made to ROHCGF are disclosed in note 4.

(b) ROH Holdings Ltd – registered company no. 02580395

ROH Holdings Ltd is a holding company with one subsidiary, ROH Developments Limited, a property development company.

ROH Holdings Ltd charges the Charity for ground rent for the property lease held by the Charity which represents a 5% income interest in the leases for the retail units on the site of the Royal Opera House.

The ground rent charged by ROH Holdings Ltd to the Charity is disclosed in note 5 and the related operating lease commitments in note 14.

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The Royal Opera House Endowment Fund 2000 Trustees’ report and financial statements Year Ended 31 August 2020 Charity number 1089928

(c) Royal Opera House Enterprises Limited – registered company no. 04112266 Royal Opera House Enterprises Limited is a subsidiary of ROHCGF and is an event, catering and video production company.

Amounts due to and from connected Charities are disclosed in the notes to these accounts. There were no other transactions with trustees, connected persons or connected charities during the year and trustees received no remuneration and were paid no expenses during the year ( 2019: nil ).

16 Ultimate parent undertaking

The smallest and largest group into which the accounts of the Charity are consolidated is the ROHCGF, (Royal Opera House Covent Garden Foundation (Limited by guarantee), company number 480523, registered charity no. 211775 whose object it is to promote and assist in the advancement of education so far as such promotion and assistance shall be of a charitable nature and in particular, to raise the artistic taste of the country, and to procure and increase the appreciation and understanding of the musical art in all its forms), the ultimate parent undertaking incorporated in the United Kingdom. ROHCGF exercises dominant influence over the Charity being both the power to govern and the ability to benefit from the Charity’s activities. Two of the trustees must be trustees of ROHCGF, all new trustees appointed must be done so in consultation with the ROHCGF and all grants are made to, or for the benefit of the ROHCGF. Its accounts are available to the public and may be obtained from The Royal Opera House, Covent Garden, London WC2E 9DD.

17 Statement of financial activities for the year ended 31 August 2019

2019 2018
Restricted
Unrestricted
(Income)
£
£
Income and endowments from:
Donations and legacies
2
- -
Investment
3
806,220
675,516
_
_________
Total incoming
806,220
675,516
_
_
Expenditure on:
Charitable activities
Grants to Royal Opera House Covent
Garden Foundation
4_
(724,000)
(1,325,438)
Raising funds
Raising donations and legacies
5
(27,073)
-
Investment managers’ fees
(99,287)
(156,190)
__
____
Total expenditure
(850,360)
(1,481,628)
__
____
Net gains on investments
6
- 198,929
______
_
Net income and movement in funds
(44,140)
(607,183)
Fund balances brought forward at
1 September 2018
12;13_
701,572
4,441,995
______
___
Fund balances carried forward at
31 August 2019
12;13
657,432
3,834,812
Note		 Restricted
(Capital)
£
2,357,210
20
_
2,357,230
_
(371,696)
-
-
__
(371,696)
__
1,593,457
__
3,578,991
40,068,495
____
43,647,486		 Total
£
2,357,210
1,481,756
_
3,838,966
_
(2,421,134)

(27,073)

(255,477)
____
(2,703,684)
____
1,792,386
__
2,927,668
45,212,062
____
48,139,730		 Total
£
5,422,024
1,675,844
_
7,097,868
_
(2,471,559)
(29,206)
(236,884)
____
(2,737,649)
____
935,701
__
5,295,921
39,916,141
____
45,212,062

26