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2020-08-31-accounts

Registered number: 05464855 Charity number: 1110639

KENT MUSIC (A company limited by guarantee)

TRUSTEES' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2020

KENT MUSIC (A company limited by guarantee)

CONTENTS

Page
Reference and administrative details of the charity, its trustees and advisers 1
Trustees' report 2 - 8
Independent auditor's report 9 - 11
Statement of financial activities 12
Balance sheet 13 - 14
Statement of cash flows 15
Notes to the financial statements 16 - 34

KENT MUSIC (A company limited by guarantee)

REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 AUGUST 2020

Trustees (at the date of approval of the financial statements)

Geoff Miles, Chair Tim Leates Sarah Hohler (appointed by Kent County Council) Francesca Christmas James Williams Paul Danielsen Robin Hammerton Elizabeth Topiwala Geoffrey Lymer (appointed by Kent County Council) Lesley-Ann Thomson (appointed 27 September 2019) Kyle Siwek (appointed 27 September 2019) Alicia Moyles (appointed 27 September 2019) Jessica Cooling (appointed 27 September 2019) Rebecca Evernden (appointed 27 September 2019)

Company registered number

05464855

Charity registered number

1110639

Registered office

24 Turkey Court, Turkey Mill Ashford Road Maidstone Kent ME14 5PP

Chief executive officer

Peter Bolton

Chief operating officer

Sally Law (appointed 1 Dec 2020)

Senior management team

Samantha Rogerson, Senior Finance Manager Trevor James, Senior Manager (Tuition & Centres)

Independent auditor

Crowe U.K. LLP Riverside House 40 - 46 High Street Maidstone Kent ME14 1JH

Patron

Jools Holland OBE

Page 1

KENT MUSIC (A company limited by guarantee)

TRUSTEES' REPORT FOR THE YEAR ENDED 31 AUGUST 2020

The Trustees present their annual report together with the audited financial statements of the company for the year 1 September 2019 to 31 August 2020. The Trustees confirm that the Annual Report and financial statements of the company comply with the current statutory requirements, the requirements of the company's governing document and the provisions of the Statement of Recommended Practice (SORP), applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

Since the company qualifies as small under section 383, the strategic report required of medium and large companies under The Companies Act 2006 (Strategic Report and Director's Report) Regulations 2013 is not required.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Constitution

The Charity is registered as a charitable company limited by guarantee, incorporated on 26 May 2005 and registered as a charity on 29 July 2005. The charity took over the assets and liabilities of Kent Music School on 1 September 2005. Kent Music School was registered as a charity on 20 November 1969.

The Charity was created under a memorandum of association which established the objects and powers of the charity and is governed under its articles of association.

Method of appointment or election of trustees

The management of the Charity is the responsibility of the trustees who are elected and co-opted under the terms of the articles of association.

Kent Music is keen to ensure that its board of trustees includes a broad base of skills and representations. The method adopted for the recruitment and appointment of new trustees is that vacancies are advertised and applications are invited. Shortlisted candidates are interviewed by the chair and another trustee.

Trustees

The Trustees that served during the year are as follows:

Geoff Miles, Chair Tim Leates Sarah Hohler (appointed by Kent County Council) Francesca Christmas James Williams Paul Danielsen Robin Hammerton Elizabeth Topiwala Geoffrey Lymer (appointed by Kent County Council) Lesley-Anne Thompson (appointed 27th September 2019) Kyle Siwek (appointed 27th September 2019) Alicia Moyles (appointed 27th September 2019) Jessica Cooling (appointed 27th September 2019) Rebecca Evernden (appointed 27th September 2019)

Page 2

KENT MUSIC (A company limited by guarantee)

TRUSTEES' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2020

Organisational structure and decision making

The board of trustees of up to 14 members meets 4 times a year to administer the Charity. A chief executive is appointed by the trustees to manage the day to day operations of the charity. There is an executive committee of trustees, which also acts as the audit committee which meets to support the chief executive and leadership team on matters concerning the day-to-day running of the organisation.

Induction training for new trustees is provided and they are also offered the opportunity to attend other relevant training courses.

RISK MANAGEMENT

The trustees continue to assess and monitor the risks facing the charity. In March 2020 a new risk register was presented to the Board along with a monitoring system which ensures that the risk register is updated and presented at each Board meeting.

OBJECTIVES AND ACTIVITIES

Policies and objectives

The purposes of the charity (the objects) shall be the promotion of the performing arts in all its forms and in particular music and for this purpose to provide education, tuition and activities for the benefit of the public generally, principally within the County of Kent and the Unitary Authority of Medway.

Mission Statement

Kent Music is an education charity that develops musical opportunities to support the aspirations of children, young people, adults and teachers in Kent.

Values

Kent Music is funded by Kent County Council to provide out of school music centres, county level ensembles and choirs and an annual summer school. The organisation is also funded by Arts Council England as the lead partner of the music education hub for Kent. In this role Kent Music works with partners to provide music education services to children aged 5 to 18.

Page 3

KENT MUSIC (A company limited by guarantee)

TRUSTEES' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2020

The vision and values are lived through a business plan. In the business plan for 2018-20 there are eight core priorities:

  1. Build tuition through a team of salaried music teachers.

  2. Systematically build the out-of-school offer

  3. Provide more opportunities for children with SEN/D and from disadvantaged backgrounds

  4. Develop a coherent offer to schools

  5. Introduce and implement a new Singing Strategy

  6. Deliver sector leading continuing professional development and quality assurance

  7. Provide opportunities for children and young people to hear high quality performers

  8. Develop a long term, sustainable business model

ACHIEVEMENTS AND PERFORMANCE

Review of activities

2019/20 was an unusual year for Kent Music because in March, part way through the year, the country was hit by the Covid-19 pandemic. This caused considerable disruption to the services that the charity was able to provide.

In the first part of the year, from September to December, the charity continued to deliver its service as normal, maintaining the number of students at 2018/19 levels and running music centres and music labs throughout the county. During the autumn, the Kent junior county choirs moved their rehearsal venue to the Medway Towns Music Centre at Fort Pitt School in Chatham. The Kent Youth Wind Orchestra met through a series of nonresidential rehearsal days culminating in a well-attended concert in December at the Collyer Fergusson Hall in Canterbury shared with the county junior and senior choirs. Kent County Youth Orchestra met for a residential course during the Christmas holidays and performed a concert at Mote Hall in Maidstone on 31 December.

Number of instrumental and vocal lessons taught February
2020		 February
2021
Number of “directlyregistered” instrument and vocal students* 1,100 520
Number of “agency” students* 700 -
Number of MusicPlusprojects delivered byKent Music*** 112 -

*Directly registered tuition is tuition where parents or carers are the customers

**Agency projects are where schools are the customers

***MusicPlus is a Kent Music programme to deliver whole class instrumental lessons to children in primary schools.

In March 2020 the charity closed its offices in Maidstone and Aylesham and staff were asked to work from home. This was a big change for the organisation but thanks to the flexibility of all members of the team, homeworking has generally worked well. The trustees moved their Board meetings to online meetings and apart from delaying one meeting at the start of the pandemic, have met as usual during this period.

Page 4

KENT MUSIC (A company limited by guarantee)

TRUSTEES' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2020

Throughout the pandemic Kent Music’s major funders Arts Council England and Kent County Council, have been very supportive and relaxed funding conditions which enabled the charity to allocate funds more flexibly. This flexibility used in conjunction with the government’s Coronavirus Job Retention Scheme enabled Kent Music to maintain its staffing levels which the trustees considered to be crucial to the charity’s ability to recover once government restrictions were eased.

At the start of the pandemic the trustees approved a short-term recovery plan which, broadly speaking, aimed to bring student numbers back up to pre-pandemic levels by the end of the 2020/21 academic year. The plan also included the provision of an online professional development programme for instrumental and classroom teachers and the development of resources through a new virtual learning environment introduced during the pandemic.

As part of the plan, online lessons were introduced for one-to-one lessons and some ensemble, choir and music lab courses were delivered online. In total 122 people took part in online ensembles and choirs during the autumn of 2020. The charity has not run any face-to-face music centres, music labs, county ensembles, choirs or the annual summer school since the start of the pandemic. Online professional development courses have been well-attended as have school network meetings that have been held for classroom teachers in most of the districts in Kent. During the summer of 2020 the charity ran an online music festival which featured performances, interviews, discussions and masterclasses.

“Day & Night” Festival – an online festival run by Kent Music in July and August 2020 “Day & Night” Festival – an online festival run by Kent Music in July and August 2020
Number of unique videos 55
Number of participants in the festival finale 79
Number of unique views on YouTube 414
Number of unique views on Facebook 1,799
Number of minutes viewed on the Kent Music website 27,100
Percentage increase in Kent Music website sessions 33

Embracing online learning has enabled approximately 45% of the lessons that were organised directly with parents to be taught. Teaching bought directly by schools has been suspended. As schools re-opened, face-toface teaching took place in approximately 50% of the schools the charity had been teaching in before the pandemic, but this was short-lived because of new restrictions introduced in December 2020 and January 2021.

Reaching the goal of bringing back student numbers to pre-pandemic levels by the end of the 2020/21 academic year is looking unlikely because of restrictions introduced in January 2021 and thus the timescale for the recovery plan is likely to be longer than originally envisaged.

During the year, a restructure of the charity’s senior management was undertaken. The purpose of the restructure was to increase operational capacity so that more time can be devoted to compliance with key areas of regulation and legislation and to release the chief executive to focus on the long-term direction of Kent Music. Consultation was carried out with affected staff during the summer months and the new structure was introduced in September 2020.

Page 5

KENT MUSIC (A company limited by guarantee)

TRUSTEES' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2020

Going concern

The trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future.

During the preparation of these accounts the COVID-19 crisis is still prevalent and continues to impact the delivery of service where Schools have been closed. The one-year recovery plan that was submitted to the Board has been implemented and is being monitored closely. It is currently estimated that the level of support from reserves that had originally been predicted should not be necessary.

KCC will continue to support the charity with a grant at the same level as the previous year of £204,000, which will cover to period to 31st March 2022.

Arts Council England (ACE) have confirmed funding at similar levels to the previous year of £2,151,970. This funding will also cover the period to 31st March 2022. Kent Music took advantage of flexibility offered in the current year to use grant income in certain instances to cover overheads given the unprecedented circumstances.

These two grants account for 83% of overall current income.

Cash at bank as at 31st August 2020 was £1,533,988. With grants in place the only unpredictable income risk relates to the level of recovery of tuition. Utilising the Furlough scheme has covered any downturn in our tuition income by covering the cost of unfulfilled hours.

FINANCIAL REVIEW

Reserves policy

In recent years the Board has been able to build up a reserve of £2,240,584 which includes an endowment fund of £333,694 and restricted funds of £1,368,214. Also included in the overall reserves figure is a Pensions reserve liability of £739,000.

Below is a breakdown of the current level of reserves and the free reserves available to the charity:

August 2020 August 2019
£ £
Total reserves 2,240,584.00 2,378,375.00
Less: restricted reserves -1,368,214.00 -1,534,112.00
Less: endowment funds -333,694.00 -333,694.00
Less:designated instruments -154,380.00 -169,046.00
Free reserves 384,296.00 341,523.00

The target level of free reserves is 3 months worth of unrestricted expenditure, which would accommodate for any unforeseen changes in income streams. Currently the level of free reserves represents 6.4 months (2019 - 4.6 months) of unrestricted expenditure so the target has been achieved in the current financial year.

Page 6

KENT MUSIC (A company limited by guarantee)

TRUSTEES' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2020

PLANS FOR THE FUTURE

A new business plan is in development to start in September 2021. The plan will draw on the experience of the 2020/21 academic year to plot a path to recovery and into a period of growth. The focus of the plan will be on four core aims: providing instrumental & vocal tuition to as many students as possible across the county; providing students access to a broad range of out-of-school music activities; creating the conditions where music thrives in Kent schools; supporting and developing the workforce. These core aims will be supported by plans for inclusion, youth voice, partnership working, income generation, communication and digital technology.

PAY POLICY FOR SENIOR STAFF

The board of Trustees review the pay and benefits for all staff once per year.

The pay for senior staff is based on industry benchmarks.

GUARANTEES

Members of the charity guarantee to contribute an amount not exceeding £1 to the assets of the charitable company in the event of winding up. The total number of such guarantees at 31 August 2020 was 12 (2019:12). The trustees have no beneficial interest in the charitable company.

INFORMATION ON FUNDRAISING ACTIVITIES

Kent Music complies with sector best practice. No complaints were received with regards to fundraising throughout the course of the year and no professional fundraisers or commercial partners conducted fundraising as charity representatives. The board of trustees monitors and manages its fundraising regulation and compliance which are discussed at board meetings.

Page 7

KENT MUSIC (A company Ilmlted by guarantee) TRUSTEES, REPORT l¢ontlnuedl FOR THE YEAR ENDED 31 AUGUST 2020 TRUSTEES. RESPONSIBILITIES STATEMENT The Trusl88s (who are also directors of Kent Music for the purposes of company law} are responsibl8 for preparing th8 Trustees. report and the financial statements in accordance wilh appllcable law and United Kingdom Accounting Standards (United Kingdom Generally Accgpled Acwunlin9 Praclicel. Company law requires th8 Trustees lo prep8re financial slalemenls for each financi81 year. Under company law the Trusl6es musl not approve the financial statements unless they are satisfied that they give a true and fair view of Ihe slate of affairs of the chari12ble company anol ol the incoming resources and application of resources. including the income and expenditure, of Ihe chartlable company for that period. In pTrparino these financi81 slalements, the Trustees are required to.. sel8cI suitable accounting policies and then apply them consislenlly.. observe the methods and principles in the ChaTiligs SORP., make judgments and accounting eslimates that are reasonable and prudonl.. prepare the financial slalemenls on the going con¢8rn basis unless il is Inappropriate lo presume that Iha charitable company will continua In q)eralion. The Truslegs are responsible for keeping ad8quatg accounting records that are sufficient lo show and explain the charilable company's transactions and disclose with reasonable accuracy al any timo Ihe financial position of the charitable company and enable them lo ensure that the financial slalemenls comply with the Companies Act 2006. They are also fosponsible for safeguarding the assets of the charitable comp2ny and h8nce for taking r8asonabl8 steps for Ihe prevenllon and detection of fraud and other irregularilios. The Trustees are responsible for the maintenance and inlegrtly of th8 corporate and financial information included on the chaiitable companls website. Leglslalion in the Uniled Kingdom governing th¢ preparation and dlsseminalion of finarrial s18temenls may differ from legislation in other jurisdictions. Dlsclosure of Informatlon to audltor Each of the ptsrsons who are Truslees al the lime when this Trustees, ￿pOrt is approved has confirmed that.. so far as that Trustee is awar8, Ih8r8 is no re18V8nl audlt Information of which the chari18ble company's audilor is unawa￿, and Ihal Trustee has taken all th& steps that ought to h&v8 been taken as a Trustee in order lo be aware of any relevant audit inftirmalion and lo establish that the charitable companvs auditor Is awar9 of Ihal information. Thls r￿ort was approv8d by the Trustees, on Ji•3,u and signed on their behalf by.. Z /17/LJ- Mr Geoff Miles, Chair Page 8

KENT MUSIC (A company limited by guarantee)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KENT MUSIC

Opinion

We have audited the financial statements of Kent Music (the 'charitable company') for the year ended 31 August 2020 which comprise the Statement of financial activities incorporating income and expenditure account, the Balance sheet, the Statement of cash flows and the related notes, 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 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 charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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

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:

Other information

The Trustees are responsible for the other information. The other information comprises the information included in the Annual report, other than the financial statements and our Auditor's report thereon. Our opinion on the financial statements does not cover the other information and 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

Page 9

KENT MUSIC (A company limited by guarantee)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KENT MUSIC

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 (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Trustees' responsibilities statement, 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 charitable company'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 charitable company 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 auditor under section 151 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.

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 charitable company's trustees, 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 charitable company's trustees those matters we are required to state to them in an Auditor's report and for

Page 10

KENT MUSIC (A company limited by guarantee)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KENT MUSIC

no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its trustees, as a body, for our audit work, for this report, or for the opinions we have formed.

Ian Weekes (Senior statutory auditor)

for and on behalf of

Crowe U.K. LLP

Statutory Auditor

Riverside House 40 - 46 High Street Maidstone Kent ME14 1JH Date: 12 May 2021 Crowe U.K. LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

Page 11

KENT MUSIC (A company limited by guarantee)

STATEMENT OF FINANCIAL ACTIVITIES INCORPORATING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 AUGUST 2020

Unrestricted
funds
Note
2020
£
Income and endowments
from:
Donations and legacies
2
259
Charitable activities
4
746,721
Investments
3
635
Total income and
endowments
747,615
Expenditure on:
Charitable activities
5
666,508
Total expenditure
666,508
Net income / (expenditure)
before other recognised
gains and losses
81,107
Actuarial losses on defined
benefit pension schemes
21
(53,000)
Net movement in funds
28,107
Reconciliation of funds:
Total funds brought forward
510,569
Total funds carried forward
538,676		 Restricted
funds
Endowment
funds
2020
£
2020
£
1,214
-
2,138,658
-
4,496
-
2,144,368
-
2,310,266
-
2,310,266
-
(165,898)
-
-
-
(165,898)
-
1,534,112
333,694
1,368,214
333,694		 Total
funds
2020
£
1,473
2,885,379
5,131
2,891,983
2,976,774
2,976,774
(84,791)
(53,000)
(137,791)
2,378,375
2,240,584		 Total
funds
2019
£
8,397
1,079,927
4,719
1,093,043
3,270,185
3,270,185
(2,177,142)
(130,000)
(2,307,142)
4,685,517
2,378,375

The notes on pages 16 to 34 form part of these financial statements.

Page 12

(A company limited by guarantee) REGISTERED NUMBER: 05464855

KENT MUSIC

BALANCE SHEET AS AT 31 AUGUST 2020

Note
Fixed assets
Intangible assets
10
Tangible assets
11
Current assets
Stocks
12
Debtors
13
Investments
14
Cash at bank and in hand
Creditors:amounts falling due within one
year
15
Net current assets
Total assets less current liabilities
Defined benefit pension scheme liability
21
Net assets including pension scheme
liabilities
Charity Funds
Endowment funds
17
Restricted funds
17
Unrestricted funds:
Unrestricted funds excluding pension
liability
Pension reserve
Total unrestricted funds
Total funds		 £
2,964
1,129,297
333,694
1,533,988
2,999,943
(174,739)
1,277,676
(739,000)		 2020
£
-
154,380
154,380
2,825,204
2,979,584
(739,000)
2,240,584
333,694
1,368,214
538,676
2,240,584		 £
13,581
1,333,984
333,694
1,609,617
3,290,876
(395,547)
1,196,569
(686,000)		 2019
£
16
169,030
169,046
2,895,329
3,064,375
(686,000)
2,378,375
333,694
1,534,112
510,569
2,378,375

Page 13

KENT MUSIC (A company Ilmlted by guarantee) BALANCE SHEET Icontlnued) AS AT 31 AUGUST 2020 The company's firtancial statements have been prepared in accordance wllh the provtslons applicable to companies subject to tha Small companies regime. The Truslees consider Ihal tho company is enlilled lo exemption from tha roquiremenl lo have an audit under the provisions of section 477 of the Companies Act 20061"Ihe Act") and members have not required the company to obtain an audit for lh8 year in question in accordance with s8Glion 476 of the Act. However. an audit is required In accordance wllh section 144 of the Charities Act 2011. The Trustees acknowledge their responsibilities for complwng wllh the requirements of the Acl with respect to accounting records and Ilw preparation of financial statements. The financial slalemenls were approved and aulhorised for issue by the Trustees on slgned on their behalf, by.. 2b,03,Jl and Mr Geoff Mlles, Chalr The notes on pages 1610 34 form part of Ihese financial slalemenls. Page 14

KENT MUSIC (A company limited by guarantee)

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 AUGUST 2020

Note
Cash flows from operating activities
Net cash (used in)/provided by operating activities
19
Cash flows from investing activities:
Dividends, interest and rents from investments
Purchase of tangible fixed assets
Net cash used in investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
20		 2020
£
(52,915)
5,130
(27,844)
(22,714)
(75,629)
1,609,617
1,533,988		 2019
£
71,418
4,719
(68,932)
(64,213)
7,205
1,602,412
1,609,617

The notes on pages 16 to 34 form part of these financial statements.

Page 15

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

1. Accounting Policies

1.1 Charity information

The principal activity of the entity during the year was the provision of music education.

The charity is a charitable company limited by guarantee which is incorporated and registered in England and Wales (05464855).

The address of the Registered office is:

24 Turkey Court Turkey Mill Ashford Road Maidstone Kent ME14 5PP

1.2 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - 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 (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The accounts have been prepared on a going concern basis. The trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future.

During the preparation of these accounts the COVID-19 crisis is still prevalent and continues to impact the delivery of service where Schools have been closed. The one-year recovery plan that was submitted to the Board has been implemented and is being monitored closely. It is currently estimated that the level of support from reserves that had originally been predicted should not be necessary.

KCC will continue to support the charity with a grant at the same level as the previous year of £204,000, which will cover to period to 31st March 2022.

Arts Council England (ACE) have confirmed funding at the same level as the previous year of £2,151,970. This funding will also cover the period to 31st March 2022. Kent Music took advantage of flexibility offered in the current year to use grant income in certain instances to cover overheads given the unprecedented circumstances.

These two grants account for 83% of overall current income.

Cash at bank as at 31st August 2020 was £1,533,988. With grants in place the only unpredictable income risk relates to the level of recovery of tuition. Utilising the Furlough scheme has covered any downturn in our tuition income by covering the cost of unfulfilled hours.

Kent Music meets the definition of a public benefit entity under FRS 102.

Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

Page 16

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

1. Accounting Policies (continued)

1.3 Company status

The company is a company limited by guarantee. The members of the company are the Trustees named on page 1. In the event of the company being wound up, the liability in respect of the guarantee is limited to £1 per member of the company.

1.4 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the company and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the company for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

Investment income, gains and losses are allocated to the appropriate fund.

1.5 Income

All income is recognised once the company has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.

For legacies, entitlement is taken as the earlier of the date on which either: the company is aware that probate has been granted, the estate has been finalised and notification has been made by the executor(s) to the Trust that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the company has been notified of the executor's intention to make a distribution. Where legacies have been notified to the company, or the company is aware of the granting of probate, and the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material.

1.6 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.

Page 17

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

1. Accounting Policies (continued)

Charitable activities and Governance costs are costs incurred on the company's operations, including support costs and costs relating to the governance of the company apportioned to charitable activities.

1.7 Intangible fixed assets and amortisation

Intangible assets are initially recognised at cost and are subsequently measured at cost net of amortisation and any provision for impairment.

Amortisation is provided on intangible fixed assets at rates calculated to write off the cost of each asset, less their estimated residual value, over their expected useful lives on the following bases:

Computer software

1.8 Tangible fixed assets and depreciation

All assets costing more than £700 are capitalised.

A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the Statement of financial activities incorporating income and expenditure account.

Tangible fixed assets are carried at cost, net of depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:

1.9 Operating leases

Rentals under operating leases are charged to the Statement of financial activities incorporating income and expenditure account on a straight line basis over the lease term.

1.10 Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

1.11 Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the company; this is normally upon notification of the interest paid or payable by the Bank.

Page 18

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

1. Accounting Policies (continued)

1.12 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

1.13 Cash at Bank and in hand

Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

1.14 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide. Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised within interest payable and similar charges.

1.15 Financial instruments

The company 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 measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

1.16 Pensions

The charity operates a defined contribution pension scheme and the pension charge represents the amounts payable by the company to the fund in respect of the year.

The charity previously operated a defined benefits pension scheme and the pension charge is based on a full actuarial valuation dated 31 March 2016 and updated to the 31st August 2020.

Page 19

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

1. Accounting Policies (continued)

1.17 Critical accounting estimates and areas of judgment

Estimates and judgments 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.

Critical accounting estimates and assumptions:

The company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

1.) The present value of the Local Government Pension Scheme defined benefit liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions, which are disclosed in note 21, will impact the carrying amount of the pension liability.

Furthermore a roll forward approach which projects results from the latest full actuarial valuation performed at 31 March 2016 has been used by the actuary in valuing the pensions liability at 31 August 2020.

Any differences between the figures derived from the roll forward approach and a full actuarial valuation would impact on the carrying amount of the pension liability.

The liability has also been calculated using mortality rates used by the UK government.

Page 20

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

2. Income from donations and legacies

Unrestricted
funds
Restricted
funds
Endowment
funds
2020
£
2020
£
2020
£
Donations
259
1,214
-
Total 2019
3,272
5,125
-
3.
Investment income
Unrestricted
funds
Restricted
funds
Endowment
funds
2020
£
2020
£
2020
£
Investment income
635
4,496
-
Total 2019
-
4,719
-
4.
Income from charitable activities
Unrestricted
funds
Restricted
funds
Endowment
funds
2020
£
2020
£
2020
£
Tuition fees
471,226
-
-
Kent County Council
204,000
-
-
Instruments hire fees
46,059
-
-
Concert fees and admission
charges
3,743
-
-
Other income
1,826
-
-
Grants
-
2,138,658
-
Coronavirus job retention
scheme
19,867
-
-
746,721
2,138,658
-
Total 2019
1,048,318
31,609
-		 Total
funds
2020
£
1,473
8,397
Total
funds
2020
£
5,131
4,719
Total
funds
2020
£
471,226
204,000
46,059
3,743
1,826
2,138,658
19,867
2,885,379
1,079,927		 Total
funds
2019
£
8,397
Total
funds
2019
£
4,719
Total
funds
2019
£
764,672
219,225
45,189
14,917
4,315
31,609
-
1,079,927

Page 21

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

5. Direct costs

Unrestricted
£
Pension income
12,000
Travel costs
37,577
Instrument costs
8,656
Staff training and recruitment
4,657
Operating lease rentals
129,811
Accommodation, computer and
office costs
57,098
Other expenses
35,876
Other teaching and administrative
costs
36,572
Bursaries
-
(Profit)/Loss on disposal of fixed
assets
272
Trustees' Indemnity Insurance
827
Professional fees
28,119
School funding
-
Projects and workshop
expenditure
380
Life insurance
5,366
Wages and salaries
188,034
National insurance
75,919
Pension cost
3,105
Depreciation and amortisation
42,239
666,508
Total 2019
933,897		 Restricted
£
-
477
39,174
22,794
-
193,226
72
3,333
72,917
-
-
67,219
423,194
-
-
1,444,120
33,625
10,115
-
2,310,266
2,336,288		 Total
2020
£
12,000
38,054
47,830
27,451
129,811
250,324
35,948
39,905
72,917
272
827
95,338
423,194
380
5,366
1,632,154
109,544
13,220
42,239
2,976,774
3,270,185		 Total
2019
£
13,000
62,436
55,579
37,331
130,935
310,556
31,066
54,541
95,305
(6,141)
679
69,662
569,442
1,947
8,991
1,639,961
108,753
27,259
58,883
3,270,185

6. Net income/(expenditure)

This is stated after charging:

2020 2019
£ £
Depreciation of tangible fixed assets:
- owned by the charity 42,223 47,891
Amortisation of intangible fixed assets 16 10,992
(Profit)/Loss on disposal of fixed asset 272 (6,141)

During the year, no trustees received any remuneration (2019 - £NIL) During the year, no Trustees received any benefits in kind (2019 - £NIL).

During the year, Robin Hammerton received payments totalling £350.00 relating to C.P.D. (2019 - £NIL).

Page 22

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

7. Auditors' remuneration

The Auditor's remuneration amounts to an Audit fee of £10,250 (2019 - £10,000), and accounts preparation of £2,500(2019 - £2,500).

8. Staff costs

Staff costs were as follows:

Wages and salaries
Social security costs
Other pension costs (Note 21
)		 2020
£
1,632,154
109,544
13,220
1,754,918		 2019
£
1,639,961
108,753
27,259
1,775,973

The average number of persons employed by the company during the year was as follows:

Teachers
Administration
The number of higher paid employees was:
In the band £100,001 - £200,000		 2020
No.
30
33
63
2020
No.
1		 2019
No.
30
34
64
2019
No.
1

During the year, the senior management team comprised the Chief Executive, Head of Education, Head of Finance and Operations and Head of Partnerships and Development. The total remuneration of key management personnel in the year was £257,601 (2019 - £271,995)

9. Other finance income

Other finance income
2020 2019
£ £
Interest on pension scheme liabilities (12,000) (13,000)

Page 23

KENT MUSIC

(A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

10. Intangible fixed assets

Intangible fixed assets
Cost
At 1 September 2019 and 31 August 2020
Amortisation
At 1 September 2019
Charge for the year
At 31 August 2020
Carrying amount
At 31 August 2020
At 31 August 2019		 Computer
software
£
43,968
43,952
16
43,968
-
16

11. Tangible fixed assets

Tangible fixed assets
Cost
At 1 September 2019
Additions
Disposals
At 31 August 2020
Depreciation
At 1 September 2019
Charge for the year
On disposals
At 31 August 2020
Net book value
At 31 August 2020
At 31 August 2019		 Long Term
Leasehold
Property
£
70,218
8,370
(4,289)
74,299
56,574
9,383
(4,018)
61,939
12,360
13,644		 Fixtures &
Equipment
£
112,503
19,474
-
131,977
76,586
6,734
-
83,320
48,657
35,917		 Instrument
s
£
672,530
-
-
672,530
553,061
26,106
-
579,167
93,363
119,469		 Total
£
855,251
27,844
(4,289)
878,806
686,221
42,223
(4,018)
724,426
154,380
169,030

Page 24

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

12. Stocks

Raw materials

2020 2019
£ £
2,964 13,581

The difference between purchase price or production cost of stocks and their replacement cost is not material.

13. Debtors

Trade debtors
Other debtors
Prepayments and accrued income
14.
Current asset investments
Long term deposit account
15.
Creditors: Amounts falling due within one year
Trade creditors
Other taxation and social security
Other creditors
Accruals and deferred income		 2020
£
125
2,568
1,126,604
1,129,297
2020
£
333,694
2020
£
32,580
33,763
17,839
90,557
174,739		 2019
£
132,884
2,121
1,198,979
1,333,984
2019
£
333,694
2019
£
106,555
43,354
12,252
233,386
395,547

Page 25

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

16. Prior year adjustment

The charity has since 2017 provided for a number of unfunded pension liabilities in accordance with FRS 102 and has recorded them within the financial statements at the present value of the commitments using an appropriate discount factor. Some of these were paid direct by the charity and some through Kent County Council. Confirmation was sought in the current year as to the status of these inidividuals and it was confirmed that those being paid by Kent County Council had also been included within the actuarial report and were therefore provided for twice. An adjustment has been made to strip out the duplicated amounts. This has resulted in an increase to unrestricted reserves of £78,859 as at 1 Sepetmber 2018.

Pension Reserve Pension Reserve
As re-stated Asperviously reported
1 September 2016 (1,430,715) (1,430,715)
Prioryear adjustment 86,702
Gains 579,013 579,013
Expenditure (1,151) (1,151)
31 August 2017 (766,151) (852,853)
Prioryear adjustment (7,843)
Gains 213,000 213,000
31 August 2018 (560,994) (639,853)
Prioryear adjustment
Losses (130,000) (130,000)
Income 4,994 4,994
31 August 2019 (686,000) (764,859)

Page 26

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

17. Statement of funds

Statement of funds - current year

Balance at 1
September
2019
£
Designated funds
Fixed asset fund
169,048
General funds
General funds
1,027,521
Pension reserve
(686,000)
341,521
Total Unrestricted funds
510,569
Endowment funds
Endowment funds
333,694
Restricted funds
KYWO instrument fund
10,265
Bursary fund
37,468
Kent Youth Choirs (KYC)
3,078
Kent Youth Wind Orchestra (KYWO)
fundraising fund
1,600
Orchestra ONE
330
Youth Music (Fund C)
4,098
Arts Council England
1,475,649
D A Baker Endowment
1,624
1,534,112
Total of funds
2,378,375		 Income Expenditure
£
£
-
(14,668)
747,615
(651,840)
-
-
747,615
(651,840)
747,615
(666,508)
-
-
-
-
1,214
(1,591)
-
-
-
-
-
(330)
4,500
(7,532)
2,134,158
(2,300,813)
4,496
-
2,144,368
(2,310,266)
2,891,983
(2,976,774)		 Gains/
(Losses)
£
-
-
(53,000)
(53,000)
(53,000)
-
-
-
-
-
-
-
-
-
-
(53,000)		 Balance at
31 August
2020
£
154,380
1,123,296
(739,000)
384,296
538,676
333,694
10,265
37,091
3,078
1,600
-
1,066
1,308,994
6,120
1,368,214
2,240,584

Page 27

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

17. Statement of funds (continued)

Statement of funds - prior year

Balance at 1
September 2018
£
Fixed asset fund
217,514
General funds
General funds
883,123
Pension reserve
(560,993)
322,130
Endowment funds
333,694
Restricted funds
KYWO instrument fund
10,265
Bursary fund
36,944
Kent Youth Choirs (KYC)
3,078
Kent Youth Wind
Orchestra (KYWO)
fundraising fund
1,600
Safer Kent
1,478
Orchestra ONE
315
Youth Music (Fund C)
-
Arts Council England
3,758,311
D A Baker Endowment
188
3,812,179
Total of funds
4,685,517		 Income
£
-
1,065,844
-
1,065,844
-
-
8,397
-
-
-
2,362
7,650
4,402
4,388
27,199
1,093,043		 Expenditure
£
(58,883)
(880,008)
4,994
(875,014)
-
-
(7,873)
-
-
-
(34,847)
(3,552)
(2,287,064)
(2,952)
(2,336,288)
(3,270,185)		 Transfers
in/(out)
£
10,417
(41,439)
-
(41,439)
-
-
-
-
-
(1,478)
32,500
-
-
-
31,022
-		 Gains/
(Losses)
£
-
-
(130,000)
(130,000)
-
-
-
-
-
-
-
-
-
-
-
(130,000)		 Balance at
31 August
2019
£
169,048
1,027,520
(685,999)
341,521
333,694
10,265
37,468
3,078
1,600
-
330
4,098
1,475,649
1,624
1,534,112
2,378,375

Page 28

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

17. Statement of funds (continued)

Purpose of restricted funds

(i) The Bursary fund relates to income received specifically to assist students with payments of tuition fees.

(ii) The Kent Youth Wind Orchestra (KYWO) instrument fund relate to funds received for the benefit of the Kent Youth Wind Orchestras.

(iii) The Kent Youth Choirs (KYC) donation fund is monies received on the closure of Medway Opera and relates to the unspent balance of monies received.

(iv) Orchestra ONE is a large scale ensemble for all abilities, particularly aimed at children and young people in challenging circumstances. Funding from the Music Education Hub has been allocated to enable it to continue for a further year.

(v) Band without Boundaries is a West Kent jazz project aimed at people of all abilities, including those with learning difficulties and restricted physical ability.

(vi) The Arts Council England fund relates to funding for the delivery of Music Education Hubs. (vii) Safer Kent is a project for young persons who are at risk of exclusion or have behavioural issues by providing music programmes.

(viii) D A Baker endowment fund relates to the income and expenditure utilised from the endowment fund for tuition for children in the West Kent area.

In the current year a misallocation of Arts Council England funding was identified where costs incurred and approved by ACE has been incorrectly left within Unrestricted Funds. A retrospective adjustment has been made in respect of these amounts which has led to an adjustment of £578,988 between Unrestricted and Restricted reserves as at 31 August 2018.

As at 31 August 2020 there is a balance of £1,308,994 because in accordance with the the Charity's accounting policy, Grant income confirmed as at 1 April for the 12 month period is recognised in full at that date. Costs are considered to be incurred evenly over the term of the grant being 1 April to 31 March. The outstanding balance includes 7 months of income which will be used from September to March in line with the grant term.

Purpose of designated funds

(i) The Fixed asset fund represents the value of funds invested in fixed assets which are not, by the nature of fixed assets, readily available for other purposes.

Pension reserve

The pension reserve included within the unrestricted reserve represents the defined benefit liability of £739,000.

Page 29

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

18. Analysis of net assets between funds

Analysis of net assets between funds - current year

Unrestricted
funds
2020
£
Tangible fixed assets
154,380
Current assets
1,298,035
Creditors due within one year
(174,739)
Provisions for liabilities and charges
(739,000)
538,676
Analysis of net assets between funds - prior year
Unrestricted
funds
2019
£
Intangible fixed assets
16
Tangible fixed assets
169,032
Current assets
1,423,069
Creditors due within one year
(395,548)
Provisions for liabilities and charges
(686,000)
510,569		 Restricted
funds
Endowment
funds
2020
£
2020
£
-
-
1,368,214
333,694
-
-
-
-
1,368,214
333,694
Restricted
funds
Endowment
funds
2019
£
2019
£
-
-
-
-
1,534,112
333,694
-
-
-
-
1,534,112
333,694		 Total
funds
2020
£
154,380
2,999,943
(174,739)
(739,000)
2,240,584
Total
funds
2019
£
16
169,032
3,290,875
(395,548)
(686,000)
2,378,375

19. Reconciliation of net movement in funds to net cash flow from operating activities

Net expenditure for the year (as per Statement of Financial Activities)
Adjustment for:
Depreciation charges
Dividends, interest and rents from investments
Loss on the sale of fixed assets
Decrease in stocks
Decrease in debtors
(Decrease)/increase in creditors
Decrease/(increase) in stocks
Pension scheme costs
Net cash (used in)/provided by operating activities		 2020
£
(84,791)
42,239
(5,131)
271
-
211,257
(227,377)
10,617
-
(52,915)		 2019
£
(2,177,142)
58,883
(4,719)
58,515
2,047,477
-
98,616
(6,212)
(4,000)
71,418

Page 30

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

20. Analysis of cash and cash equivalents

Cash in hand
Total		 2020
£
1,533,988
1,533,988		 2019
£
1,609,617
1,609,617

21. Pension commitments

The company operates Defined Benefit pension schemes. The assets of the scheme are held seperately from those of the company in an independently administered fund. The contributions payable by the company to the fund amounted to £28,452 (2019 - £27,259). The contributions payable by the company to the fund amounting to £8,239 (2019 - £8,479) were payable to the fund at the balance sheet date and included within creditors.

The company operates a Defined benefit pension scheme which is closed to new members.. Principal actuarial assumptions at the Balance sheet date (expressed as weighted averages) :

2020 2020 2019 2019
Discount rate at 31 August 1.45 % 1.75 %
Future salary increases 3.40 % 3.85 %
Future pension increases 2.40 % 2.35 %
RPI increases 3.25 % 3.35 %
CPI increases 2.40 % 2.35 %
At 31 August At 31 August
Sensitivity analysis 2020 2019
£ £
Discount rate +0.1% 3,003,000 2,919,000
Discount rate -0.1% 3,084,000 2,999,000
Mortality assumption - 1 year increase 3,213,000 3,113,000
Mortality assumption - 1 year decrease 2,883,000 2,813,000

Page 31

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

21. Pension commitments (continued)

The assets in the scheme and the expected rates of return were:

Equities
Gilts
Other bonds
Property
Cash
Absolute return fund
Total market value of assets		 Fair value at
31 August
2020
£
1,493,000
15,000
298,000
253,000
70,000
175,000
2,304,000		 Fair value at
31 August
2019
£
1,549,000
16,000
205,000
265,000
61,000
177,000
2,273,000

The actual return on scheme assets was £1,250,000 (2019 - £44,000).

The amounts recognised in the Statement of financial activities incorporating income and expenditure account are as follows:

2020 2019
£ £
Interest on obligation (12,000) (13,000)

Movements in the present value of the defined benefit obligation were as follows:

Opening defined benefit obligation
Interest cost
Actuarial losses
Unfunded pension payments
Benefits paid
Closing defined benefit obligation		 2020
£
2,959,000
51,000
167,000
-
(134,000)
3,043,000		 2019
£
2,839,000
70,000
174,000
(7,000)
(117,000)
2,959,000

Page 32

KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

21. Pension commitments (continued)

Changes in the fair value of scheme assets were as follows:

Opening fair value of scheme assets
Actuarial gains and (losses)
Contributions by employer including unfunded pension payments
Admin expenses
Interest on assets
Benefits paid
Other actuarial gains/(losses)		 2020
£
2,273,000
114,000
7,000
(1,000)
39,000
(134,000)
(5,000)
2,293,000		 2019
£
2,279,000
44,000
18,000
(1,000)
57,000
(124,000)
-
2,273,000

The cumulative amount of actuarial gains and losses recognised in the Statement of total recognised gains and losses was £NIL (2019 - £NIL).

The company expects to contribute £NIL to its Defined benefit pension scheme which is closed to new members. in 2021.

The major categories of scheme assets as a percentage of total scheme assets are as follows:

2020 2020 2019 2019
Equities 65.00 % 68.00 %
Bonds 13.00 % 9.00 %
Cash 3.00 % 3.00 %
Gilts 1.00 % 1.00 %
Property 11.00 % 12.00 %
Target Return Portfolio 8.00 % 8.00 %

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KENT MUSIC (A company limited by guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

21. Pension commitments (continued)

Amounts for the current and previous four periods are as follows:

Defined benefit pension schemes

Defined benefit
obligation
Scheme assets
Deficit
Experience
adjustments on
scheme assets		 2020
£
(3,043,000)
2,293,000
(750,000)
114,000		 2019
£
(2,959,000)
2,273,000
(686,000)
44,000		 2018
£
(2,839,000)
2,279,000
(560,000)
48,000		 2017
£
(3,060,000)
2,288,000
(772,000)
284,000		 2016
£
(3,421,000)
2,075,000
(1,346,000)
198,000

22. Operating lease commitments

At 31 August 2020 the total of the Charity’s future minimum lease payments under non-cancellable operating leases was:

Amounts payable:
Within 1 year
Between 1 and 5 years
Total		 2020
£
152,954
25,602
178,556		 2019
£
-
174,728
174,728

23. Related party transactions

During the year, trustee indemnity insurance was purchased for £827 (2019 - £679). In addition to this, trustees expenses reimbursed in the year amounted to £nil (2019 - £nil).

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