## **Butterfly Conservation** ## **Annual Report and Financial Statements** 31 March 2022 Company Limited by Guarantee Registration Number 02206468 (England and Wales) Registered charity number 254937 (England and Wales) and SC039268 (Scotland) ## **Contents** ## **Reports** |**Reports**|| |---|---| |Reference and administrative information|1| |Overview by the Chair|3| |Overview by the Chief Executive|4| |Report of Council|5| |Independent auditor’s report on the|| |financial statements|27| |**nancial statements**|| |Consolidated statement of financial|| |activities|32| |Comparative consolidated statement of|| |financial activities|33| |Balance sheet|34| |Statement of cash flows|35| |Principal accounting policies|36| |Notes to the financial statements|43| Butterfly Conservation ## **Reference and administrative information** |**President**|Sir David Attenborough OM CH CVO CBE FRS FSA| |---|---| |**Vice-Presidents**|Jim Asher| ||Maurice Avent| ||Nick Baker| ||John F Burton FZS FRES DL Cbiol| ||Dudley Cheeseman| ||Sue Collins| ||The Earl of Cranbrook PhD| ||David Dennis| ||Mike Dilger| ||Clive P Farrell| ||Julian Gibbs (sadly passed away in June 2021)| ||David Hanson| ||Ian Hardy MVO| ||Chris Packham CBE| ||Professor Jeremy Thomas| ||Alan Titchmarsh MBE| |**Council Members (Directors and**|Karen Goldie-Morrison (Chair)| |**Trustees)**|Ilija Vukomanovic (Vice Chair)| ||Nigel Symington (Honorary Treasurer)| |**Trustees**|Glenn Allison| ||Apithanny Bourne| ||Hugh Ellerton| ||Prof Laurence Harwood| ||Dr Elaine King| ||Simon Saville| ||Chris Winnick| |**Senior Leadership Team**|Julie Williams (Chief Executive and Company Secretary)| ||Dr Kate Dent (Director of Engagement & Volunteering)| ||Dr Dan Hoare (Director of Conservation)| ||Russel Hobson (Director of Evidence & Policy)| ||Lynne Mackintosh (Director of Finance & Operations)| |**Registered address**|Manor Yard| ||East Lulworth| ||Wareham| ||Dorset| ||BH20 5QP| |**Company registration number**|02206468 (England and Wales)| Butterfly Conservation **1** ## **Reference and administrative information** |**Registered charity number**|254937 (England and Wales)| |---|---| ||SC039268 (Scotland)| |**Website**|butterfly-conservation.org| |**Twitter**|@savebutterflies| |**Facebook**|Facebook.com/savebutterflies| |**Instagram**|Instagram.com/savebutterflies| |**Auditor**|Buzzacott LLP| ||130 Wood Street| ||London| ||EC2V 6DL| |**Bankers**|NatWest plc| ||49 South Street| ||Dorchester| ||Dorset| ||DT1 1DW| |**Solicitors**|Stone King LLP| ||Boundary House| ||91 Charterhouse Street| ||London| ||EC1M 6HR| |**Investment managers**|Cazenove Capital Management| ||1 London Wall Place| ||London| ||EC2Y 5AU| Butterfly Conservation **2** **Overview by the Chair** Year to 31 March 2022 ## **Overview by the Chair** It is clear that nature in the UK is under considerable threat from biodiversity loss, climate change and pollution. To combat these threats, Butterfly Conservation works to conserve and recover butterfly and moth species and champion them for the benefit of both nature and people. We do this most effectively by working in partnership with a wide range of organisations and landowners to recover landscapes for nature. Recently we have delivered significant results for threatened species through working with our Back from the Brink partners in England, and we seek to achieve the same through Species on the Edge in Scotland and Natur am Byth! in Wales. In addition, collaborative projects such as Brilliant Butterflies and Big City Butterflies focus on encouraging widespread species by creating new habitats like butterfly banks. The Big Butterfly Count continues to connect more than 100,000 people each year to nature. These citizen scientists contribute important data to our monitoring schemes, which enable our science and research teams to adapt and develop the most effective conservation methods for species across the UK. We also speak for species through our advocacy work. In 2021 we launched Grasslands+, a coalition with our partners - Plantlife and Bumblebee Conservation Trust - to save grasslands around the world. Species-rich grasslands are crucial in the fight against climate change as they hold around a third of the world’s carbon. So, this new campaign will both raise their profile and demonstrate their importance in tackling the climate crisis and enhancing biodiversity. Once again the key to our success this year has been the work, dedication and resilience shown by our staff and our UK-wide network of volunteers and members. All have been crucial to Butterfly Conservation’s continued success in species conservation, and I thank them all. Butterfly Conservation **3** **Overview by the Chief Executive** 31 March 2022 ## **Overview by the Chief Executive** There is no doubt that the last couple of years have been very challenging, but the natural world has provided solace and enjoyment for many people. Butterfly Conservation’s vision of a world where butterflies and moths thrive and can be enjoyed by everyone forever has never been more important. Our work and impact on finding ecological and climate solutions and creating opportunities and spaces for people to engage with nature is at the very heart of what we do. During the year we launched Butterfly Conservation’s most ambitious strategy to date. Over the next four years we are committed to delivering the biggest possible impact for nature. To do this we need to build on our successes and focus our resources. And people are the key to making this step change in nature conservation. I would like to take this opportunity to thank the people who consistently make positive change for us; our volunteers, branches and staff for their incredible achievements during the year and to our members and supporters for their continued support. We cannot deliver the new strategy on our own. We need to collaborate more with existing and new partners, we need to engage and attract more people, we need to increase our research and we need to influence change with our advocacy work. This annual report provides concrete examples of how we are doing all that. The challenge in 2022/23 is to ensure we have more sustainable funding. We need to be more lean and scalable with an improved infrastructure in place for our staff and volunteers. But we also have huge opportunities to make a difference for nature and for people. Nature is in crisis but by working together we can navigate the ambitious journey our new strategy has set us upon. Butterfly Conservation **4** **Report of the Council** Year to 31 March 2022 The Council of Butterfly Conservation presents its report together with the consolidated financial statements of the charity and its trading subsidiary, Butterfly Conservation Trading Limited, for the year ended 31 March 2022. This report equates to a directors’ report as required by Part 15 of the Companies Act 2006 and has also been prepared in accordance with the Charities Act 2011. The financial statements have been prepared in accordance with the accounting policies set out on pages 36-42 and comply with the charitable company’s Articles of Association, applicable laws and 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 United Kingdom and Republic of Ireland (FRS 102). Council members confirm they have given due regard to the Charity Commission’s guidance on public benefit and have considered how our aims and activities demonstrate this to fulfil our charitable objectives. ## **Our Vision** A world where butterflies and moths thrive and can be enjoyed by everyone, forever. ## **Our Purpose** We conserve and recover butterflies and moths and champion them for the benefit of nature and people. ## **Our Strategic Goals** - Halve the number of the UK’s threatened species of butterflies and moths. - Improve the condition of 100 of the UK’s most important landscapes for butterflies and moths. - - Transform 100,000 wild spaces in the UK for butterflies, moths and people. ## **The Initiatives** We will deliver these Strategic Goals through a programme of Initiatives. - Recover butterflies and moths - Connect people to nature - Unite for wildlife - Tackle threats to nature - Manage land sustainably ## **The Enablers** Our Enablers are the essential platform for achieving our Strategic Goals. Butterfly Conservation **5** **Report of the Council** Year to 31 March 2022 - Inspiring communications - Sustainable funding - Lean and scalable organisation - High performing staff and volunteer team ## **Our Values** Our values underpin our culture, the way we do things and what we believe in. - **Deliver Excellence** We use our wealth of scientific evidence and practical experience to deliver positive change for butterflies, moths and nature. We are the experts you can trust us to give you the information you need. - **Passionate** Nature is at the heart of all we do. We are dedicated to delivering positive change to conserve butterflies, moths and our environment. We are relentless in the pursuit of our vision, seeking new ways to make a difference. - **Inspiring** We take action and speak up for what we believe in; we enable people to understand, enjoy and care for butterflies and moths. - **Collaborate** We will achieve our vision by building networks, communities and partnerships to deliver success for nature. Our culture champions and promotes inclusion, equality and diversity. ## **Our Year in Numbers** - 32 million larger moth records made in the National Moth Recording Scheme, the highest-ever number - People spent 2.6 million hours recording butterflies and moths, which is equal to 1,477 full-time members of staff - 38,053 hours spent counting butterflies by Big Butterfly Count participants, equivalent to 4.3 years - 26,200 people reached by the Big City Butterflies project launch - 10,558 people volunteered 160,967 hours, which is equal to 96 full-time members of staff - 806 sites were visited by Butterfly Conservation staff, the highest since 2018 - 44 school workshops took place, reaching 1,301 children - 1,917 sites being monitored by Butterfly Monitoring Scheme volunteers - 195 new sites added to the Butterfly Monitoring Scheme - 74 Green Recovery events reached 720 people who took part in 185 days of practical conservation work - Chequered Skipper now occupies an area equivalent to 86 hectares - 2,833 Fiery Clearwing eggs counted as part of Kent’s Magnificent Moths project - 10,083 moth foodplants grown as part of Kent Magnificent Moths project - 15 scientific papers co-authored by Butterfly Conservation - 80 organisations signed up the Grasslands+ campaign, and 8,000 emails sent to MP’s Butterfly Conservation **6** **Report of the Council** Year to 31 March 2022 - 233 sites worked on across three landscapes on the Back from the Brink project, engaging 4,500 people - 700 hectares of grazed land in the Cotswold influenced through the Back from the Brink project, and three new Large Blue sites identified ## **Recover butterflies and moths** ## **Saving threatened species** At the heart of Butterfly Conservation’s ambitious new strategy is the goal to halve the number of the UK’s threatened species of butterflies and moths. Our UK conservation strategy identified 129 threatened species so at least 65 species, half this total, need to be prioritised for action over the next five years. The new priority list includes many long-standing conservation priority species, such as High Brown Fritillary, Wood White and Black-veined Moth, and also some new species that have undergone significant declines in recent years, including Silvery Arches and Marsh Carpet moths. Species were selected based on threat level across their UK range, meaning that some regional priorities, such as Dingy Skipper and Argent & Sable, haven’t been included. There will, however, be the opportunity to work on such species through the landscapes initiative. The new programme will be wide-ranging, including additional survey and monitoring to understand the status of many of the moths, research to identify causes of decline, and onthe-ground conservation to be delivered with Branches, volunteers and project partners. Ultimately, we aim to make the future of these species more secure by 2030. ## **Revolutionising species research** In 2021/22 a new database was published which holds a wealth of vital ecological information on the butterflies and larger moths of Great Britain and Ireland. This database, which has been collated by Butterfly Conservation, incorporates important information about species’ traits that previously existed across a wide range of sources such as field guides, books and journals. This new resource brings all this information together into one usable, digital document titled _Traits data for the butterflies and macro-moths of Great Britain and Ireland_ , and focuses on 968 species in total. A trait is a characteristic of a species such as forewing length or the number of caterpillar foodplants it can survive on. Other traits included in our database include life-cycle timings and habitat use. Distribution and abundance trends are also included. In addition to this Dr Phil Sterling, Barry Henwood and Bloomsbury Publishing kindly allowed us to use data on host plant use from their _Field Guide to the Caterpillars of Great Britain and Ireland_ , making it possible to quickly answer questions such as ‘how many species feed on oaks?’. Recently, research has been conducted using species traits to understand patterns of population change or to explain and predict how butterflies and moths will respond to environmental changes, such as climate change, habitat fragmentation and artificial light at night. The new database will, therefore, open up many new possibilities for further research, and Butterfly Conservation is producing a scientific paper looking at many of these traits and species’ population changes. This database is available through the Environmental Information Data Centre website, operated by the UK Centre for Ecology and Hydrology, and will be updated as new information becomes available. ## **Monitoring threatened moths** The _Rare Moth Indicator_ produces trends that are used by government alongside data from other schemes such as the United Kingdom Butterfly Monitoring Scheme (UKBMS) and the Farmland Bird Index to assess the health of wildlife in the UK. The number of species included Butterfly Conservation **7** **Report of the Council** Year to 31 March 2022 in the _Indicator_ was initially quite small and we are now developing methodologies that allow additional species to be included. During 2021/22 existing datasets for Slender Scotch Burnet, New Forest Burnet, Forester Moth and Rosy Marsh Moth were added to the _Indicator_ and monitoring of six further species was started. Trials were conducted on an additional dozen species, although not all are able to produce reliable trends. As well as contributing to the _Rare Moth Indicator_ , monitoring allows us to detect problems with site management. At one site for the rare Greenweed Case-bearer, counts of larvae dropped from 931 in 2013 to just one in 2018 due to over-grazing. Following discussions with the landowner, grazing levels were reduced and the larval count in 2021 has climbed to 326. Many dedicated volunteers contribute to the _Rare Moth Indicator_ . In Scotland, nine hardy souls overcame very remote locations and the Scottish weather to prove that monitoring of the Mountain Burnet was possible, finding two new colonies in the process! ## **Connect People to Nature** **From Brilliant Butterflies to Wild Spaces** The ‘Brilliant Butterflies’ project worked with partners and the local community to create a network of butterfly banks across South Croydon and Bromley including three in New Addington primary schools. At Fairchildes School, we cut into a slope on the playing fields to create a bank using chalk subsoil from the site. At Castle Hill and Applegarth schools the levelled playing fields meant imported chalk was needed to create suitable conditions for wildflowers to thrive. The children of Fairchildes Primary School weren’t afraid to get their hands dirty to help plant the large bank at their school with 200 plug plants of 11 different species that will be perfect for butterflies and caterpillars to feed on including the rare Small Blue. This project is an early example of our ambitious goal of transforming 100,000 Wild Spaces for people, butterflies and moths. We have been working to describe how we define a Wild Space, how we record our progress and impact, how we equip people with the information and resources they will need. We want to empower anyone, anywhere, to transform a space – be it a balcony ten floors up, a community allotment or a school field like Fairchildes. We’re excited to welcome a Wild Spaces Manager to our team. They will lead efforts to secure funding, develop projects and partnerships and create new resources to bring the Wild Spaces goal to life. ## **Green Recovery for People and Nature in Morecambe Bay’s Woodlands Project** The Morecambe Bay’s Woodlands project has been offering wellbeing sessions to a variety of groups in the area since March 2021. These were being offered to help people connect to nature and the woodland environment. We particularly aimed to reach people from a variety of different socio-economic backgrounds so established links with local mental health charities. These included The Lighthouse based in Kendal, Adullam based in Lancaster and the Prop-up-Project, a charity based in Carnforth and Morecambe working with young people. We are now delivering regular monthly sessions for each group we work with, along with woodbank days which are open to all. Offering a range of sessions has been key in enabling attendees to connect with nature. Activities ranged from practical habitat management of the sites, but also work with local artists to explore responses to their environment through printing and drawing. Art has been a tool to overcome a fear of moths or butterflies, to enable them to observe these fantastic creatures up close without being scared. The project ended in June and we are seeking funding to continue to promote the wellbeing of both the people and the woodlands. Butterfly Conservation **8** **Report of the Council** Year to 31 March 2022 ## **Urban meadows thrive with Helping Hands for Butterflies** Our ‘Helping Hands for Butterflies’ project in Scotland has had another great year, with a mix of online and in person events being offered to volunteers. It has been great to get back to in person events and everyone has been happy to be out, carrying out practical work for butterflies and moths. Our meadows have responded, with some of them now attracting an increased variety of wider-countryside species such as Ringlet, Meadow Brown, Small Heath and Small Copper. As we near the end of the project, thoughts have turned to the lessons we’ve learned from Helping Hands for Butterflies. It has been hugely successful in recruiting and supporting volunteers; more people have found Butterfly Conservation for the first time through the project and we have offered many different opportunities to stay involved throughout the year. We’re starting to look at how we can build on this and deliver even more urban Wild Spaces in the future! ## **Unite for Wildlife** ## **Heath Fritillary in Kent** The last two summers have been the best years on record for the Heath Fritillary in Kent. A peak of 3,901 individual butterflies were counted in the woodlands of The Blean in North Kent during the last week of June 2021. The Heath Fritillary is one of the UK’s rarest butterflies. It occurs in just four confined areas - Exmoor in Somerset, the Tamar and Lydford Valleys on the Cornwall/Devon border, North Kent and a complex of small woodlands in South Essex. These superb results are the culmination of more than three decades of conservation action. In the early 1980s the species was on the brink of extinction from the UK. We have worked with woodland owners including RSPB, Wildlife Trust, and Forestry England to identify opportunities to expand and connect isolated colonies, ultimately leading to the strong populations we are now seeing. These populations are now driving increased dispersal as the butterfly looks for more space. At least three woodlands have been newly colonised in Kent, with a highlight being the discovery in April 2021 of larvae at the Woodland Trust’s newly planted Victory Wood. This former arable site overlooking the Thames Estuary will be an important link between existing woods in that landscape, and the Heath Fritillary has wasted no time in moving into this new space. As the butterfly extends its range we are working with more woodland owners and managers to ensure even more rich, open, sunny woodland is available. ## **Green shoots of recovery** In 2021/22 the Wales Green Recovery Fund enabled us to review our work in Wales to understand the gaps between our ambition and our capacity to deliver future work. We’ve also looked at where we need to do better: improving our engagement with diverse audiences, building new partnerships to help us make more impact where people live and work, and improving the way we use the Welsh language in our work. With these insights, our Wales team is now better equipped to deliver our strategic goals, building new partnerships to make an even greater impact for butterflies, moths and people. In England, the Green Recovery Challenge Fund has underpinned the next phase of our exciting work to reintroduce the Chequered Skipper to Rockingham Forest. After successfully bringing back the butterfly to England, the next challenge is to establish a stronger population across a wider network of sites to ensure it can thrive here. Surveys in 2021 showed that the butterfly is still doing well here three years after the initial release and has spread further through these open woodlands. ## **Partnerships around the UK** Working with others is the best way for us to influence land management across a wider area and magnify our impact to halt the biodiversity crisis. Butterfly Conservation **9** **Report of the Council** Year to 31 March 2022 We’ve spent the last year helping to develop one of Scotland’s biggest ever conservation projects. ‘Species on the Edge’ aims to recover a suite of 37 threatened and declining species, including New Forest Burnet, Slender Scotch Burnet, Transparent Burnet, Talisker Burnet, Northern Brown Argus, Small Blue and Marsh Fritillary. In partnership with NatureScot and six other charities we developed a coordinated conservation action plan and established relationships with landowners from Caithness to the Isle of Mull. We are now bidding for support from National Lottery Heritage Fund to deliver on these plans. In Northern Ireland both of our key partnerships, _Cooperation Across Borders for Biodiversity_ and _Lepidoptera in Our Landscapes_ , funded by INTERREG and the Northern Ireland Environment Agency, have been extended into 2022, giving a further boost to our work on species including Marsh Fritillary, Large Heath and Cryptic Wood White. We’re also part of a major new project in Wales: _Natur am Byth!_ This collaboration between charities and government aims to achieve Wales’ largest natural heritage and outreach programme. This year we secured development funding and employed two officers planning conservation action and public engagement for one of the UK’s rarest butterflies, High Brown Fritillary, in the Alun Valley, its last foothold in Wales. ## **Tackle Threats to Nature** ## **Light pollution research** Light pollution affects everyone in the UK: 99.9% of people live under light polluted night skies and over three-quarters are unable to see the Milky Way where they live. It affects plants and animals too in many complex ways that science is only just starting to unravel. Over the past eight years, Butterfly Conservation has helped to fund and supervise two PhD students (Callum Macgregor and the late Douglas Boyes) researching the impact of artificial light at night on moths in collaboration with Newcastle University and the UK Centre for Ecology & Hydrology. Through these projects, we have demonstrated that many nocturnal moths transport the pollen of a wide range of plants. However, streetlights disrupt this activity, for example by luring moths away from the vegetation, and can affect the pollination of plants. Most importantly, streetlights have a direct and significant impact on local moth populations, reducing caterpillar numbers by almost a half in illuminated hedgerows and one third on grassy road verges – the first study to show real-world impacts of light pollution on moth abundance. These projects have also developed new ways to identify pollen using DNA barcoding, which found that lighting reduces the activity of nocturnal caterpillars and that the current switchover to LED streetlights is causing further damage to local moth populations. ## **Supporting Science** Each butterfly encounter or moth trap unveiling provides a connection with nature. That moment can also live forever, observed as a scientific record. Thousands of observations of moths and butterflies flow through Butterfly Conservation’s flagship recording schemes. These records provide us with evidence to underpin understanding and take action. The Supporting Science project was made possible by Department of Digital, Culture, Media and Sport and National Lottery funding, distributed by The Heritage Fund as part of their Digital Skills for Heritage initiative. The project aims to strengthen our butterfly and moth data infrastructure. It will support recorders and volunteers who share and check butterfly and moth sightings with well-maintained digital tools and opportunities to refresh and share skills. Over two thirds of County Recorders check relevant butterfly or moth records within iRecord. With the Field Studies Council (FSC) we created a new course for County Recorders, building on the popular FSC Biolinks’ Discovering iRecord series. Initial feedback is good and will Butterfly Conservation **10** **Report of the Council** Year to 31 March 2022 inform development of iRecord training for butterfly and moth recording beginners and a follow up verification skills course. During the year Supporting Science has also started to reimagine the Garden Butterfly Survey. Participants of this online citizen science survey share garden butterfly observations with us throughout the year. We have redesigned the website, so that records are now delivered directly to County Recorders for checking and feedback via iRecord, smoothing the dataflow. We want the Garden Butterfly Survey to reflect the breadth and diversity of gardens and citizen scientists across the UK. We have expanded the survey to enable insights into all shapes and sizes of garden – including shared spaces around flats, community gardens and allotment plots. We’re looking forward to getting to know the growing Garden Butterfly community better over the year ahead, connecting with them via newsletters and social media activity. ## **Grasslands+ campaign** In the run up to the COP 26 Climate Change conference in 2021, Butterfly Conservation joined forces with Plantlife and Bumblebee Conservation Trust to raise the profile of grasslands as an important means of tackling the biodiversity and climate crisis. As well as being important for some of our most threatened butterflies and moths, grassland conservation and restoration has a critical role in carbon sequestration and storage. The campaign was targeted at UK politicians and gave the coalition a chance to explore new ways of collaborating and working with expert campaigners 89 Up. The campaign achieved significant press and social media coverage, reached almost every MP and saw Early Day Motions lodged in Westminster and Holyrood. For Butterfly Conservation we also learnt what makes a successful coalition campaign and that creating a separate identity for Grasslands+ can make joint campaigning more efficient. ## **Manage Land Sustainably** ## **Extending our reach with Severn Trent** In 2021/22 we have launched a new three-year conservation partnership with Severn Trent called _Butterfly Mosaics_ . This project will restore and enhance a variety of habitats at 60 sites across the Midlands to benefit at least 8 priority species. The work covers land managed by private landowners and other organisations as well as our own nature reserves. We have already visited 30 sites, in some cases, providing advice and support, but also funding targeted work to benefit Wood White, Small Pearl-bordered Fritillary, Dingy Skipper, Brown Hairstreak and Grayling, increasing the amount and the quality of suitable habitat for these species. In Nottinghamshire, through our East Midlands Branch volunteers and Nottinghamshire Biodiversity Action group, conservation work parties have been held at 8 sites with the aim of increasing the availability of suitable egg laying sites to benefit Grizzled Skipper. While Warwickshire Branch volunteers worked with partners on key sites across the county to plant larval food plants for Wood White and other species. Work was also carried out on our nature reserves including Prees Heath, Grafton Wood and Monkwood. At Prees Heath, we will appoint a consultant to investigate the feasibility of grazing. This would make management more sustainable and ensure the site continues to support a thriving Silver-studded Blue population long into the future. With support from branch volunteers, we monitored the impact of winter management work and site advice, assessing the outcomes for habitat condition and priority species. By assessing what works we can improve our site advice and management and share examples with other land managers to broaden our reach even further. Overall, our ability to support Butterfly Conservation **11** **Report of the Council** Year to 31 March 2022 positive land management for butterflies and moths in the Midlands is reaching new heights. ## **Bringing species Back from the Brink** The innovative Back from the Brink partnership has come to an end after four years. Butterfly Conservation is hugely proud of the collective achievements of this programme. We led the delivery of three projects – in the Cotswolds, Rockingham Forest and for Barberry Carpet – and collaborated in several others as well as being part of the steering group that supported the whole programme. Overall, 96 species made conservation progress, including Chequered Skipper, Wood White, Duke of Burgundy and Large Blue. The partnership has also produced recommendations for the wider sector on how to measure success in species conservation. Working with landowners and land managers was key, with 865 landowners receiving specific advice on managing their lands for species, and 89 organisations involved as partners across England. From creating bare ground for Grey Carpet moth in the Brecklands of Suffolk, to planting new hedgerows for the Barberry Carpet moth in Wiltshire, finding ways to sustainably manage land with space for threatened species is at the heart of our work. The influence of this England-focused programme is now reaching across the UK as similar partnerships develop to find new ways of saving species. ## **Grazing without fences in the Cotswolds** Sustainable grazing is a vital tool to maintain the precious grassland habitats that support many butterflies and moths. One legacy of our work in the Cotswolds through the Back from the Brink project has been to help trial virtual fencing with the Painswick Beacon Conservation Group. The system replaces conventional fencing with GPS collars controlled through a mobile app to set a digital fence. This removes the need for electric fencing and allows the Dexter cattle that graze this large limestone grassland site, to be targeted where their grazing is needed to support both the Large Blue, re-introduced to the site in 2018, and Duke of Burgundy butterflies. We’ve also helped the National Trust purchase GPS collars for their conservation grazing herd of Belted Galloways, some of which graze our Rough Bank nature reserve. This is allowing the National Trust to get grazing onto sites where installing fencing isn’t feasible, creating habitat for Marsh Fritillary. It’s a brilliant combination of traditional grazing and modern technology. ## **Enablers** ## **The platform of success** There has been a considerable amount of work during 2021/22 to review where we are now and where we need to get to deliver our new strategy. This is reflected in our Enablers work this year. ## **Inspiring communications** Butterfly Conservation already achieves a huge amount of publicity for campaigns. This year our Big Butterfly Count was the biggest success yet but, for our ambitious new strategy to be successful, we need to build on such successes to publicise the brilliant work that our teams are carrying out all across the UK. We have developed and are implementing a new and ambitious Marketing and Communications Strategy. This is based on extensive research into our audiences to attract, engage, convert and retain new people to help deliver our ambitious plans. We are also building a bigger team of talented and committed people who will use a diverse range of tools across all media channels to; support our fundraising aims, to raise awareness through producing compelling and interesting content and to communicate our mission and brand more widely to all of our stakeholders; including our members, supporters and donors. We know that the stories we tell create positive change in the world. Butterfly Conservation **12** **Report of the Council** Year to 31 March 2022 ## **Lean and scalable organisation** To implement our new strategy, we have been restructuring teams across our Directorates. This began by bringing in a new Director of Finance and Operations. To deliver our Initiatives we have recruited new staff and altered existing staff roles. For instance, we hired a dedicated GIS specialist to provide training to staff and volunteers and in mobilising our data to increase advocacy impact. We need to determine where we need to invest in technology to make us more efficient and a review of our digital infrastructure will be commissioned this year. Investing in access to new databases to find funders and getting new technologies up and running is critical to so many areas of our work – membership, volunteering and fundraising. Exploring ways of simplifying processes to remove duplication particularly in our finance systems and learning to embrace the positives associated with new ways of working. We have undertaken a comprehensive review of our policies and our land management advice looking back over the last twenty years to see what can be ditched, what needs updating and what new advice we need for the land management hub and to aid the development of Wild Spaces. Finally we need to focus on our organisational sustainability, particularly with new ways of working. ## **High performing staff and volunteer team** We have put in place some of the groundwork to deliver this enabler. A new Head of People and Culture is in place to improve our recruitment and staff development; looking at all those processes that help staff achieve their potential. We also agreed Butterfly Conservation’s first Equality, Diversity and Inclusion Statement of Intent with an action plan to deliver in the coming year. We have resumed regular meetings with our Branch chairs and other committee members that were disrupted before Covid-19. There is a wider need for volunteer training so we have reviewed all our volunteer role profiles to ensure they are fit for the future and we are in the process of creating training resources for these and rolling this out to all volunteers in 2022. We are also keen to help our branches work better together, so we are developing an online forum for branches to help facilitate that, with much more planned to improve communication. ## **Sustainable funding** We have been expanding our fundraising capacity to deliver new areas of work. Many of the fundraising successes are throughout this report with many requiring a quick turn around and, of course, not every application is successful. Key to success with funders is having prepared projects that can be quickly submitted so we have developed a funding opportunity plan that includes, for instance, our project proposal to develop a Global Butterfly Index. It has been particularly difficult to find funding in Northern Ireland but an application to Dormant funds NI will increase our fundraising capacity. Our individual giving team has reviewed our major donor programme, membership offer and legacy work. Another major area of new activity is around green investment and our new corporate officer will be responsible for this as well as developing our corporate relationships more widely. We have also been working towards Cyber Essentials accreditation to make us eligible for public sector contracts. ## **Future Priorities** ## **2022-2023** - Commission a new volunteer database and make it ready for launch in 2023. Training and support will be provided early in 2023, helping volunteers to access necessary information and report their activities online or via an app. Butterfly Conservation **13** **Report of the Council** Year to 31 March 2022 - Launch a new volunteer training programme providing essential training for active volunteers and a range of supplemental training courses open to active and prospective volunteers to help develop specific interests and skills. - We will assess existing participation in our Citizen Science projects to identify barriers to wider engagement, how to overcome them and assess the health & wellbeing benefits of taking part. - We will review our landscape projects to date, examining the outcomes for habitats and species to improve the way we work at a landscape-scale. - Develop our new land management hub and update our advice portfolio for different audiences. - Expand our advocacy impact across the four UK countries with new staff deploying our evidence effectively. ## **2023- 2025** - We will run our first International Symposium in five years. - Roll out our programme of Wild Spaces across the UK working with new partners, organizations and communities to make a real difference for butterflies and moths including linking with our Munching Caterpillars education programme. - Continue our digital transformation; introducing new systems for handling our biological data, assessing habitat improvements and managing our finances and project development. - Develop our research impact by applying our evidence to our advocacy work especially around land management schemes in each of the UK countries. - We will have fully established a new landscapes programme to increase our impact in landscape-scale conservation action. ## **Beyond 2025** - We will publish a new Butterfly Atlas to celebrate 25 years since the ground-breaking Millennium Atlas was released ## **Risk Management** Risk management is well established and integrated into every aspect of our work. The Coronavirus crisis fully tested our business contingency planning and we implemented a Covid-19 contingency plan at the beginning of the pandemic, which has successfully delivered throughout the last two years. Council takes all reasonable steps to ensure that major risks are identified and recorded in a Risk Register. The Risk Register is in two parts: operational risks, which are identified by management, and strategic risks on a wider scale, which may also be highlighted by Council. Operational risks are reviewed and updated quarterly by the Senior Leadership Team. Both parts of the register are reviewed four times per year by the Audit & Risk Sub-committee, with a report being submitted to each Council meeting. The Audit & Risk Sub-committee undertake a more robust, in-depth annual review of both the operational and strategic risk register in December to ascertain the principal risks facing Butterfly Conservation. These reviews ensure the risks are accurately described, no significant risks are omitted, suitable mitigations are in place and are being satisfactorily managed. Council is aware that such processes are designed to mitigate rather than to eliminate major risks and will continue to improve and refine risk management principles in all aspects of our work. Butterfly Conservation **14** **Report of the Council** Year to 31 March 2022 ## **Principal Risks and uncertainties** - **Funding to deliver the 2026 Strategy** Council considers the securing of funding to deliver the 2026 Strategy as the charity’s major risk. Increased competition to existing and new funding streams and new members makes the fundraising effort more challenging and the economic downturn may have a detrimental effect on income levels, potentially seriously impacting Butterfly Conservation’s ability to deliver its core objectives. We have taken action to reduce costs as much as possible in 2021/22 and have applied for emergency funding, where available. We have developed a new strategy to 2026 which will include diversification of income streams to ensure we are less reliant on declining statutory funding from government agencies. We will increase our focus on unrestricted income and individual giving and will continue to maximise funding opportunities from campaigns and brand awareness through closer working between our fundraising, communications and conservation teams. We will also explore options for more partnership working and landscape projects, such as the Species on the Edge project in Scotland, and build relationships with potential major funders. We plan to invest in our fundraising capacity to ensure we have a healthy project pipeline and our strong membership recruitment and retention strategies are supported by high standards of customer care. - **Covid-19** - Business continuity may be affected from further Covid-19 spikes through repeated lockdowns, confused government guidance, staff illness, and a reduction in income and membership. Increased home working and isolation can impact on staff morale and wellbeing. To help control these factors our business continuity plan was updated in January 2021 and is continually reviewed and different funding streams are being explored due to an increase in competition. Innovative methods were developed for online engagement and Butterfly Conservation’s Head Office in Dorset remained open for essential work only. In September 2021 our Head Office was opened up to more staff, ensuring the safe working guidelines and desk rotas previously implemented remained in place. Guidelines for field visits, events, recording and monitoring have been regularly updated to ensure compliance with changing regional and national guidance, and a ‘Top Tips’ document was introduced for branch events. We provided ongoing advice to volunteers, and this remains under regular review. - **Organisational change and digital transformation** Ineffective change management can cause poor communication and lack of engagement, weak line management structures can undermine staff objectives and pressures on staff can result in stress, loss of morale and enthusiasm. A loss of key staff can challenge effective management of Butterfly Conservation and its ability to recruit suitable replacements. A new Head of People and Culture post was created and the post filled in October 2021 and is responsible for HR support, organisational development and change. New staff engagement platforms have been introduced including regular Q&A sessions with the CEO and Senior Leadership Team, weekly staff newsletters, staff lunch time talks, and an online social networking service to help keep staff connected. To ensure all staff continue to feel supported, and regularly updated of any changes, a review of the internal communications implemented during 2020 is being undertaken in 2022, and a People and Culture Strategy is being developed. Staff have access to an Employee Assistance Programme, mental health tools and online wellbeing pages. Mental Health Champions and First Aiders have been identified and training is underway. Butterfly Conservation **15** **Report of the Council** Year to 31 March 2022 Work programmes are used to monitor demands on staff, and workloads and stress levels are monitored by Line Managers every quarter. Time management sheets are used by all staff to ensure annual leave and time off in lieu is taken. Ongoing statutory and relevant training is provided to all staff through an internal training platform. A full digital transformation review is planned to be undertaken during 2022/23 to ensure Butterfly Conservation is using technology to maximum effect to deliver the 2026 Strategy. - **Impacts of the Climate & Biodiversity crises** Failure to tackle climate and biodiversity crises can impact on Butterfly Conservation’s reputation, guidance and operations. We continue to actively support and raise awareness for climate action within the UK and are currently working on our Sustainability Plan which will be launched in 2022/23. ## **Health & Safety** Butterfly Conservation’s health and safety (H&S) policy, codes of practice and risk assessments are reviewed on a regular basis. The need for H&S training is assessed regularly and implemented for staff and volunteers. Where H&S incidents arise, they are properly followed up and reviewed by Council. ## **Safeguarding** Butterfly Conservation is committed to ensuring the safety and welfare of children and vulnerable adults. We will ensure our staff, volunteers and contractors comply with best practice and regulatory requirements across all the physical and virtual spaces where we operate. All suspicions or disclosures of abuse will be properly reported, recorded and acted upon. Our Safeguarding Policy is published on our website. ## **Equality, Diversity & Inclusion (EDI)** Our work on equality, diversity and inclusion (EDI) has progressed this year, discussing ways forward with our Rethink Nature network as well as contributing to the Wildlife and Countryside Link EDI project steering group to support development of a route map to help increase levels of ethnic diversity. This work also seeks to understand what is helping and hindering minority ethnic people from becoming a greater part of the environment sector. Alongside this, a Statement of Intent has been developed for BC. This statement lays out our commitment to equality, diversity and inclusion and defines our call to action for all our staff and volunteers. Our three equality objectives describe the actions we will take in 2022/23 to live and breathe these commitments. Our first step will be to bring together a joint working group consisting of staff, volunteers, and members in 2022 to co-develop and implement a more detailed action plan. ## **Sustainability Policy** The development of Butterfly Conservation’s new Sustainability Policy and Action Plan were put on hold in 2020/21 due to the pandemic. We are planning to launch the new policy in 2022/23 and it will look at reducing the impact of our work but also at how we mitigate our impact, adapt to climate change and increase our resilience. We will also consider how we monitor and report on our performance and the changes we are making. Sustainability should be a key objective of the organisation to ensure it is embedded in all our decision making. Butterfly Conservation **16** **Report of the Council** Year to 31 March 2022 ## **Financial Review** Income decreased slightly by 2.9% to £4.35m (2021: £4.48m). Grant funding decreased by 7.2% to £1.10m (2021: £1.18m). Mainly due to various projects ending during the year, resulting in an overall reduction in payments received from funders such as Nature England. Income from donations and legacies decreased by 7.8% to £1.25m (2021: £1.35m). Despite the pandemic and economic climate, we continued to have a good response to all our individual appeals and general donations (including Gift Aid). Membership subscription slightly increased by 2.3% to £1.27m (2021: £1.24m). Expenditure remained at the same level at £4.27m (2021: £4.27m). This was partly due a planned reduction due to the pandemic and the start of the investment to deliver the Strategy. There has been 3.6% increase in total assets over the year. The capital value of our endowment fund increased by £0.29m to £5.59m (2021: £5.30m). The result was a net income of £0.37m (2021: net income of £0.86m) and the closing total net assets were £12.31m (2021: £11.94m). ## **Fundraising Policy** We are registered with the Fundraising Regulator and comply with the key principles embodied in their Code of Fundraising as set out in our Fundraising Promise (butterflyconservation.org/legal/our-fundraising-promise). Several safeguards are in place for our supporters: we include data protection permission options and a three-point ‘Our promise to you’ on all fundraising materials; a detailed Supporter Guarantee can be found on our website (butterfly-conservation.org/legal/supporterguarantee). All fundraising is conducted in-house and we monitor activity to ensure it adheres to our strict guidelines. No external professional fundraiser or third-party organisation is engaged in fundraising activities on behalf of the charity. Corporate businesses have agreements in place to use Butterfly Conservation’s logo for promotional purposes. All agreements can be terminated with immediate effect if the commercial participators do anything that could bring our reputation into disrepute. Butterfly Conservation operates a strict opt-in policy for all direct marketing in line with the EU General Data Protection Regulation. All direct mail fundraising communications sent out are covered by active, informed and specific permission by the individual. Supporters are offered the opportunity to revise consent preferences in each communication. We also monitor the level of asks sent out to ensure unreasonable requests are not made to any individual. All staff adhere to our Policy for Supporters in Vulnerable Circumstances, which provides guidance to help identify vulnerable individuals and ensure that all supporters are treated fairly. Butterfly Conservation has received a total of two complaints regarding aspects of our fundraising during the year. Both complaints were fully investigated, appropriate action was taken, and a detailed response was sent to individuals within seven days. We received one notification from the Fundraising Preference Service during 2021/22 and this was dealt with immediately. ## **Investment Policy** Our investment income is derived from an Endowment Fund intended to provide the charity with a permanent source of income. We are bound to invest this to seek a balanced return from income and capital growth: we aim for each to grow in line with inflation (CPI) over the long term. To achieve an appropriate balance between risk and return, we invest in a diversified portfolio of equities, bonds and alternative assets: a breakdown of investment holdings is given in Note 15. We invest through pooled funds and third-party managers. Butterfly Conservation **17** **Report of the Council** Year to 31 March 2022 On 31 March 2022 our Endowment Fund had a market value of £5.59m (2021: £5.30m). Trustees rely upon professional advice for fund selection and allocation. At their meeting on 10 June 2020 Council passed a resolution to invest on a Total Return basis. The initial value of the trust for investment and the initial value of the Unapplied Total Return were established on 31 March 2020. The initial value of the Trust for investment was determined at £3.09m by reference to our records: the Unapplied Total Return was calculated as the difference between that value and the portfolio value at 31 March 2020. To ensure that we meet our obligations to balance the needs of current and future beneficiaries, trustees agreed a policy that we should allocate 3.25% of the portfolio value, after investment management fees, to income each year. The balance of the Total Return is then allocated to the trust for investment. We took advice on this figure from Cazenove Charities. Council has further resolved that we should follow the principles of socially responsible investment. We will do so by holding sustainable assets, in particular those that support the United Nations Sustainable Development Goals. We seek to engage, through our investment managers, with companies to encourage changing behaviours to reduce consumption and emissions. We have no direct and de minimis indirect exposure to companies with fossil fuel reserves (0% at 31 March 2022). We identified both ethical and financial reasons for taking this approach. A further consequence of this policy is a significant reduction in the carbon footprint of our portfolio. The total return on the endowed investments during the year to 31 March 2022 net of management charges amounted to £0.5m, of which £0.2m has been transferred to the revenue reserves of the charity under the Total Return approach for application (see Note 19 to the accounts). ## **Financial Reserves Policy** At 31 March 2022 Butterfly Conservation had total funds of £12.31m (2021: £11.94m). These funds included our permanent endowment totalling £5.59m (2021: £5.30m), which was given to provide future income for Butterfly Conservation. Restricted funds totalled £1.18m (2021: £1.23m) as set out in detail in Note 20 to the financial statements. A further £1.42m (2021: £1.15m) represents freehold nature reserves and other tangible and intangible fixed assets. Council has designated a total of £0.32m (2021: £0.28m) for the purposes as detailed in Note 22 to the financial statements. Butterfly Conservation’s unrestricted funds at 31 March 2022 amounted to £5.54m (2021: £5.41m). These funds include £1.15m (2021: £1.15m) being the tangible fixed assets fund balance and £0.02m (2021: £0.02m) being the retained profits of Butterfly Conservation Trading Company. Both funds are central to Butterfly Conservation’s charitable activities and the funds would not be available to meet future contingencies should they arise. The funds available for meeting ongoing future reserves, i.e., free financial reserves, therefore total £4.06m (2021: £4.00m). These free financial reserves are held to ensure that Butterfly Conservation: - Support delivery of the 2026 Strategy - maintains sufficient levels of working capital to allow for seasonal fluctuations. - protects its essential conservation activities in the event of shortfalls in grant and general income within the next financial year; and - maintains funds to respond to conservation opportunities. These funds equate to approximately eight months’ budgeted operating costs for 2022/23. Council has reviewed the charity’s Financial Reserves Policy with the designation of this money and has also taken into consideration the continued reduction in statutory agency funding and the need to invest financial resources into achieving our 2026 Strategy. Considering these factors, Council has calculated that the amount of financial reserves it needs to hold is £3.5m (2021: £2.5m). The members of Council are therefore satisfied with the year end reserves position being higher than £3.5m due to the uncertainties around higher inflation, the ongoing pandemic, cost of living crisis and the economic impact of the war in Ukraine,. In 2022/23 we will continue to implement our Fundraising Strategy to maintain our conservation effort and financial reserves to the target level. However, with the ongoing Butterfly Conservation **18** **Report of the Council** Year to 31 March 2022 uncertainties that may have some negative impact on our finances during the next few years. Positive action is planned to mitigate potential reduction in income during this period. ## **How We Raised Our Funds** Total income £4.35m (2020/21 £4.48m) - Donations and legacies £1.25m - Membership subscriptions £1.27m  Conservation activities – grants £1.10m  Contracts and Royalties £0.35m  Investments £0.24m  Primary Purpose Trading £0.09m  Other trading activities £0.05m ## **How We Spent Our Funds** Total expenditure £4.27m (2020/21 £4.27m) - Conservation £3.65m - Membership services £0.39m  Raising funds £0.23m Butterfly Conservation **19** **Report of the Council** Year to 31 March 2022 ## **Structure, Governance and Management** ## **Members of Council** Council members constitute directors of the charity for the purposes of the Companies Act 2006 and trustees of the charity for the purposes of charity legislation. Each member of Council has responsibility for monitoring the charity’s activities in specific operational areas and constant regard is paid to refreshing the experience mix of members of Council to ensure that Council continually develops the skills required to contribute fully to the charity’s advancement. The following Council members were in office during the year to 31 March 2022 and served throughout that year except where shown: |**Council Members**|**Re-elected/Resigned**| |---|---| |Karen Goldie-Morrison – Chair|| |Mike Dean – Vice Chair|Resigned in November 2021| |Ilija Vukomanovic – Vice Chair (from November
2021)|Re-elected in November 2021| |Nigel Symington – Honorary Treasurer|Re-elected in November 2021| |Glenn Allison|Elected in November 2021| |Apithanny Bourne|Re-elected in November 2021| |Hugh Ellerton – Treasurer-Elect (from Dec 2021)|| |Dr Susan Foden|Resigned in November 2021| |Prof Laurence Harwood|| |Dr Elaine King|Elected in November 2021| |Simon Saville|Re-elected in November 2021| |Chris Winnick|Re-elected in November 2021| All members of Butterfly Conservation are eligible to seek election to Council at the Annual General Meeting (AGM). One-third of Council members (also known as trustees) stand down each year on rotation and new Council members are elected at Butterfly Conservation’s AGM in November. New Council members receive comprehensive information to understand their roles and responsibilities to the charity. A detailed induction is arranged to provide new and re-elected Council members with a strategic and operational overview of Butterfly Conservation. The induction is also optional for all Council members to attend as a refresher. A Board Buddy system was introduced in 2021 to assist new trustees joining Council to be paired with an existing trustee as a mentor. This system has been incorporated into the trustee cycle and forms part of the annual review process. To familiarise themselves with the work of the charity, Council members are invited to key meetings and events. During the Covid-19 crisis, meetings in person have not been possible, but trustees have been using video Butterfly Conservation **20** **Report of the Council** Year to 31 March 2022 conferencing facilities to ensure effective governance continues. The Chair holds annual review meetings with individual Council members, to discuss his/her contribution during the year and agree plans for self-development, as well as an annual Board performance review, which includes feedback from the Senior Leadership Team. A trustee skills audit is undertaken each year to identify any gaps in expertise and highlight future requirements to ensure that Council has sufficient skills to operate as a diverse and effective Board. All Council members are encouraged to undertake training seminars from external professionals and are offered subscriptions to relevant governance resources. Council is responsible for identifying and recruiting new Council members who complement the expertise of existing members and who fill the gaps identified in the skills audit. Various methods are used including advertising in _Butterfly_ magazine, and the Branch email updates. Succession planning has been at the forefront of Council’s agenda due to the Honorary Treasurer’s forthcoming retirement in November 2022 and the Chair’s anticipated retirement in November 2023. In December 2021, Council appointed Hugh Ellerton as Treasurer-Elect until the AGM in November 2022 when he will become the new Treasurer. This allows time to ‘shadow’ the current Treasurer through 2022. In 2021, Council began its Chair succession and recruitment preparations. An external recruitment company was instructed in November 2021 to assist with recruiting a new Trustee with the potential to become, and interest in becoming, Chair. The new Trustee will be eligible for election at the 2022 AGM. The new Chair will then be selected from existing Trustees who put themselves forward for the position in 2023. Due to ongoing Covid-19 restrictions, the AGM was held online for a second year in November 2021. Eligible members were able to vote on the Resolutions and Trustee Elections by proxy in advance of the AGM, and over 380 people attended. Council members declare all relevant interests and register them with the Company Secretary and, in accordance with Butterfly Conservation’s Code of Conduct Policy, withdraw from decisions where a conflict of interest arises. Details of any relevant transactions can be found in Notes 11 and 25 of the accounts. Council continues to adopt the Charity Governance Code (CGC), which assists charities to develop and maintain a high level of governance through continuous development. ## **Responsibilities of Council** The members of Council (who are also directors of Butterfly Conservation for the purposes of company law and trustees for the purpose of Charity law) are responsible for preparing the annual report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company law requires the members of Council to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charitable company and the group and of the income and expenditure of the group for that period. In preparing these financial statements, the members of Council are required to: - select suitable accounting policies and then apply them consistently; - observe the methods and principles in Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable to the United Kingdom and Republic of Ireland (FRS 102); - - make judgements and estimates that are reasonable and prudent; Butterfly Conservation **21** **Report of the Council** Year to 31 March 2022 - state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation. Council members are responsible for keeping proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and applicable Charities Accounts (Scotland) Regulations. They are also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Each member of Council confirms that: - so far as the Council member is aware, there is no relevant audit information of which the charitable company’s auditor is unaware; and - he/she has taken all the steps that Council members ought to have taken in order to make himself/herself aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006. The members of Council are responsible for the maintenance and integrity of the corporate and financial information contained on the charitable company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. ## **Strategy and Policy Setting** Council determines the overall strategy and policy of Butterfly Conservation. Council currently meets four times a year and these meetings have been held online during 2021/22 due to the Covid-19 restrictions. Council delegates some of its responsibilities to three committees who report back to Council with recommendations: Audit & Risk, Governance and Investment. From time to time the Chief Executive initiates individual Task and Finish Groups designed to work on specific areas. These groups report directly to the Chief Executive and are made up of a mixture of members of staff, Council members and external individuals depending on the topic and their expertise. ## **Staff and Branches** The Chief Executive, assisted by the Senior Leadership Team, is responsible for the day-today management of Butterfly Conservation, acting under authority delegated to her by Council. During the year, we employed on average 68 members of staff (79 in 2020/21) who are grouped into six main work areas: Conservation, Evidence & Policy, Engagement & Volunteering, Fundraising and Communications, Finance and Operations, Chief Executive’s Office. Our local action is co-ordinated by a UK-wide network of 31 Branches and a European Butterfly Group. Each Branch is managed by a volunteer committee. Our dedicated Branch Committee members are true ambassadors for Butterfly Conservation and all the fantastic work we do. We are indebted to everyone who contributes to making our Branch network so strong and successful. Butterfly Conservation **22** **Report of the Council** Year to 31 March 2022 ## **Pay and Remuneration Policy** Butterfly Conservation is committed to ensuring that we pay our staff fairly and in a way that ensures we attract and retain the right skills to have the greatest impact in delivering our charitable objectives. The key management personnel of the charity in charge of directing and controlling, running and operating the charity on a day-to-day basis comprise the members of Council, Chief Executive and the Senior Leadership Team. Butterfly Conservation conducts a fair recruitment process, with clear person specifications for each role to ensure objective criteria are used to shortlist and interview applicants. In addition, this year there has been increased focussed on values-based interviewing to support our commitment to our values of Excellence, Passionate, Inspiring, and Collaborative. Individuals are recruited based on their commitment and alignment to our values, as well as their skills and technical expertise. This helps to reduce unconscious bias, creates a positive work environment, and enhances staff engagement and morale. The results of the gender pay gap calculations for 2021/22 show that the full time equivalent weekly earnings for men is 16% more than women. The 2021/22 full-time equivalent median weekly earnings for men are also 14% more than for women. This demonstrates an improvement since 2020/21 when the mean and median gender pay gap was 19% and 17% respectively. The differential arises as currently more men hold senior positions within the organisation (61% of those falling in the upper pay quarter are men). The charity’s Pay and Remuneration Policy states how salary and pay awards are set, including remuneration for the Chief Executive and Senior Leadership Team. The same benefits arrangements, including pensions, and terms and conditions apply to all employees, including the Senior Leadership Team. Pay bands and salary increments are reviewed annually against several other NGOs and using benchmarking tools widely available in the voluntary sector. Further salary banding information on the Senior Leadership Team’s remuneration is included in Note 11. Council members are not remunerated but are reimbursed for reasonable out-of-pocket expenses (as stated in Note 11). ## **Trading** Butterfly Conservation Trading Limited was incorporated in February 2010 to conduct trading activities in support of Butterfly Conservation’s charitable activities. The company is registered in England and Wales under company number 07166835 and is a wholly owned trading subsidiary. The directors of the trading company have elected to donate, in accordance with an agreed deed of covenant, all of its annual taxable profit to its parent charity, Butterfly Conservation, under Gift Aid. For the year ended 31 March 2022, the donation amounted to £49,551 (2021: £24,780). Butterfly Conservation **23** **Report of the Council** Year to 31 March 2022 ## **Thank you** We are extremely grateful to all our members, supporters and funders and the organisations that have generously continued to support the charity in 2021/22, including all donors who wish to remain anonymous. On behalf of Butterfly Conservation, thank you to everyone who supported our work. Unfortunately, we do not have space to individually name all funders but would like to acknowledge the following, who provided support of £1,000 or more: ## **Grant Funders** Carmarthenshire County Council Ceredigion County Council Cotswold Area of Outstanding Natural Beauty Devon County Council Fidra Garfield Weston Foundation Grantscape Groundwork UK Hampshire County Council London Wildlife Trust National Trust Natural England Northern Ireland Environment Agency Plantlife Postcode Local Trust Rural Payment Agency Scottish Forestry Scottish Natural Heritage The National Lottery Heritage Fund The Royal Society for the Protection of Birds Worcestershire Wildlife Trust ## **Charitable Trusts and Foundations** AEB Charitable Trust Cambridge Chrysalis Trust D G Albright Charitable Trust DFN Charitable Foundation GESS Charitable Trust Henocq Law Trust Miss Kathleen Beryl Sleigh Charitable Trust P F Charitable Trust Robert Kiln Charitable Trust The Banister Charitable Trust The Big Give Trust The D S Smith Charitable Trust The Hugh Fraser Foundation The Jack Patston Charitable Trust The John Swire 1989 Charitable Trust The Lady Eda Jardine Charitable Trust The Marlow Trust The Orcome Trust The Patsy Wood Trust The Valentine Charitable Trust The Walter Guinness Charitable Trust Butterfly Conservation **24** **Report of the Council** Year to 31 March 2022 ## **Corporate Partners and Supporters** Animal Friends Insurance B&Q plc Charity Car Ecclesiastical Insurance Offices Limited Facebook Habitat Aid Highland Titles Limited Naturetrek Limited NHBS Limited Papillon Dartmoor Distillery Rapanui STRI Ltd ## **Corporate Members** Highland Titles Nature Reserve Naturetrek Limited Stone King LLP Wildflowers Scotland ## **Legacy gifts** Much of our successful conservation work is underpinned by the generosity of supporters who have left a gift in their Will. All gifts, whatever their size, are hugely valuable, making a lasting difference to butterfly and moth conservation. We would like to thank our generous benefactors for these important gifts: ## **Legacies** Beryl Mary Serjeant (known as Billie) Campbell Robert Smith Carole Robinson Claire Turner Daphne Olive Graiff David Andrew Barbour David Morgan David Philip Hooker David William Gordon Sawyer Elizabeth Green Elizabeth Joan Mary Warren Elizabeth Mariana Staley Freda Janet Neal Gwendoline Reavill Janine Dunn Kathleen Patricia Trasler Maureen Osborne Hutton Irvine Michael Alan Rockett Michael George Nash Molly Helen Kearns Pauline Anne Stewart Haworth Peter Allen Yeo Robert William Norwood Rodney Clyde Silk Roger Charles Airey Sheila Christine Dawsey Sheila Elaine Hindley-Greaves The Edward Geoffrey Montague Niblett Will Trust Winifred Mary Oram Butterfly Conservation **25** R•port of the Councll Year to 31 March 2Lr22 11 you would like lo find out more a￿Lrt lewng a gift in your wll, please call Amarnla Brazington on 01929 406048 or email abrazi on buiter11-conservabon.or Report of the councll approvod for on and behalf of councll: Karen Gddifrmorrison, Chair Julie Wlliam8, Seue Approved by COU￿11 on.. BLthrfy conserv8ts.on 26 **Independent auditor’s report on the financial statements** 31 March 2022 ## **Independent auditor’s report to the member of Council and members of Butterfly Conservation** ## **Opinion** We have audited the financial statements of Butterfly Conservation (the ‘charitable parent company’) and of Butterfly Conservation and its subsidiary company (collectively the ‘group’) for the year ended 31 March 2022, which comprise the group statement of financial activities, the group comparative statement of financial activities, the group and charitable parent company balance sheets, the group statement of cash flows, the principal accounting policies and notes to the financial statements. 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: - give a true and fair view of the state of the group’s and of the charitable parent company’s affairs as at 31 March 2022 and of the group’s income and expenditure for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended). ## **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 group 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. Butterfly Conservation **27** **Independent auditor’s report on the financial statements** 31 March 2022 ## **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: -  the members of Council’s use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or -  the members of Council have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the charitable parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. ## **Other information** The members of Council are responsible for the other information. The other information comprises the information included in the Annual 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. ## **Opinions on other matters prescribed by the Companies Act 2006** In our opinion, based on the work undertaken in the course of the audit: -  the information given in the Report of the Council including the strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements; and -  the Report of the Council including the strategic report has been prepared in accordance with applicable legal requirements. Butterfly Conservation **28** **Independent auditor’s report on the financial statements** 31 March 2022 ## **Matters on which we are required to report by exception** In the light of the knowledge and understanding of the group and the charitable parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Council including the strategic report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion: -  proper and adequate accounting records have not been kept by the charitable parent company, or returns adequate for our audit have not been received from Branches not visited by us; or -  the charitable parent company financial statements are not in agreement with the accounting records and returns; or -  certain disclosures of Council members’ remuneration specified by law are not made; or -  we have not received all the information and explanations we require for our audit; or -  the members of Council were not entitled to prepare the financial statements in accordance with the small companies’ regie and take advantage of the small companies’ exemptions in preparing the Report of the Council and from the requirement to prepare a strategic report. ## **Responsibilities of Council** As explained more fully in the Responsibilities of Council statement included in the Report of the Council, the members of Council (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 members of Council 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 members of Council are responsible for assessing the group’s and the charitable parent 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 members of Council either intend to liquidate the group or the charitable parent company 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. Butterfly Conservation **29** **Independent auditor’s report on the financial statements** 31 March 2022 **Auditor’s responsibilities for the audit of the financial statements** (continued) Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: -  the Audit Director (and Senior Statutory Auditor) ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; -  we identified the laws and regulations applicable to the charitable company through discussions with management, and from our commercial knowledge and experience of the sector; -  the identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit; -  we focused on specific laws and regulations which we considered may have a direct material effect on the accounts or the activities of the group. These included but were not limited to the Charites Act 2011, Charities Accounts (Scotland) Regulations 2006 (as amended), Companies Act 2006 and data protection legislation. -  we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, inspecting legal correspondence and reviewing Member of Council meeting minutes. We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: -  making enquiries of management and those charged with governance as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and -  considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: -  performed analytical procedures to identify any unusual or unexpected relationships; -  tested journal entries to identify unusual transactions; -  tested the authorisation of expenditure as part of our substantive testing thereon; -  assessed whether judgements and assumptions made in determining the accounting estimates set out in the accounting policies were indicative of potential bias; and -  used data analytics to identify any significant or unusual transactions and identify the rationale for them. Butterfly Conservation **30** ## **Independent auditor’s report on the financial statements** 31 March 2022 ## **Auditor’s responsibilities for the audit of the financial statements** (continued) In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: -  agreeing financial statement disclosures to underlying supporting documentation; -  reviewing the minutes of member of Council meetings and -  enquiring of management and those charged with governance as to actual and potential litigation and claims. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. 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 members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and to the charity’s members of Council (the trustees and directors of the charitable company) as a body, in accordance with Section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company's members 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 charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed. Gumayel Miah (Senior Statutory Auditor) For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL 29th July 2022 Butterfly Conservation **31** **Consolidated statement of financial activities** Year to 31 March 2022 |Notes|
**Unrestricted**
**funds**
**£’000**|
**Restricted**
**funds**
**£’000**|
**Endowment**
**funds**
**£’000**|**2022**
**Total**
**funds**
**£’000**|2021
Total
funds
£’000| |---|---|---|---|---|---| |**Income from:**
Donations and legacies
1
Other trading activities
2
Investments & interest receivable
3
Charitable activities
. Conservation activities –
grants receivable
4
. Contracts and Royalties
. Primary purpose trading
. Membership subscriptions
Other sources

**Total income**


**Expenditure on:**
Raising funds
5
Charitable activities
. Conservation
6
. Membership services
7
**Total expenditure**
6

**Net income (expenditure)**
**before investment gains**
Net investment gains
15,17
**Net income (expenditure)**
10
Transfer between funds
20
**Net movement in funds**
**Reconciliation**
Total funds brought forward at 1
April 2021
**Total funds carried forward at**
**31 March 2022**|
**1,191**

**47**

**10**

**241**
**294**
**83**
**1,270**

**-**|
**54**

**-**

**2**

**856**

**61**

**11**

**-**
**-**|

**-**

**-**

**225**


**-**

**-**

**-**

**-**
**-**|**1,245**
**47**
**237**
**1,097**
**355**
**94**
**1,270**
**-**|1,351
72
148
1,182
310
121
1,241
54| ||
**3,136**|**984**|**225**|**4,345**|4,479| ||


**207**

**2,535**

**392**|

**4**

**1,115**

**-**|


**13**


**—**

**—**|**224**
**3,650**
**392**|249
3,643
378| ||
**3,134**|
**1,119**|
**13**|**4,266**|4,270| ||

**2**

**—**|
**(135)**

**—**|
**212**

**287**|**79**
**287**|209
649| ||
**2**

**130**|
**(135)**

**83**|
**499**


**(213) **|**366**
—|858
—| ||**132**
**5,411**|
**(52)**
**1,231**|
**286**


**5,299**|**366**
**11,941**|858
11,083| ||**5,543**|**1,179**|**5,585**|**12,307**|11,941| All of the group’s activities derived from continuing operations during the above financial periods. The group has no recognised gains and losses other than those shown in the consolidated statement of financial activities. No summary income and expenditure account has been produced as the only difference to the statement of financial activities would be the omission of endowed income of £225,000 (2021: £128,000); endowed expenditure of £13,000 (2021: £26,000). Butterfly Conservation **32** **Comparative consolidated statement of financial activities** Year to 31 March 2021 |Notes|
Unrestricted
funds
£’000|
Restricted
funds
£’000|
Endowment
funds
£’000|
2021
Total
funds
£’000| |---|---|---|---|---| |**Income from:**
Donations and legacies
1
Other trading activities
2
Investments & interest receivable
3
Charitable activities
. Conservation activities –
grants receivable
4
. Contracts and Royalties
. Primary purpose trading
. Membership subscriptions
Other sources

**Total income**


**Expenditure on:**
Raising funds
5
Charitable activities
. Conservation
6
. Membership services
7
**Total expenditure**
6

**Net income (expenditure)**
**before investment gains**
Net investment gains
15,17
**Net income (expenditure)**
10
Transfer between funds
20
**Net movement in funds**
**Reconciliation**
Total funds brought forward at 1
April 2020
**Total funds carried forward at**
**31 March 2021**|
1,240

72

14

50
258
115
1,241

54|
111

—

6

1,132

52

6

—
—|
—

—

128

—

—

—

—
—|
1,351

72

148

1,182

310

121

1,241
54| ||
3,044|1,307|128|4,479| ||


223

2,180

378|

1

1,463

—|

25

—

—|
249

3,643

378| ||
2,781|
1,464|
25|
4,270| ||

263

19|
(157)

—|
103

630|209

649| ||
282

(182)|
(157)
297|
733

(115)|
858
—| ||100
5,311|
140
1,091|
618
4,681|
858
11,083| ||5,411|1,231|5,299|11,941| Butterfly Conservation **33** Balance sh•et 31 March 2022 Group 2022 Charity 1022 2021 2021 Flxtd a•••ts Intangible fixed Os TarvJible fixed assets Invèsbnents 13 14 15 80 1.374 5.2gg 6.753 1.364 15.585 1.374 5.299 6,753 1.384 7,009 Curr•nt u••ts stoc*8 oobtors C08h at bank ond in hand . Short temi depc*ts and inl•r••t beanThJ occounts . Current acwjnts 10 3.113 3.101 1.435 5,411 3,113 3,101 1,375 5,388 Llablll¢l• c￿￿110r$. amounts tslhrrfj d wthin one ye•r 18 {2911 12231 12201 N•t currnnt 5 188 ￿76 5 168 T•)tsl n•t a•B•ts 11.941 Fund• of th• ¢h•ilty •pital lund8 Endowment fvnd• In￿rn• frJnd• . Resln"cted fund• 19 5.299 20 1.179 1.231 1.179 1,231 Unrmtrthd fvnd• . Qeneral fvnd Non-charrtabk• trndiTrJ fv Tangits￿ •nd intangible Ba••ts l*idudin9 frethbj natum r•sofve61 fvnd Oe81gnated fund Total lund• 4.067 3,970 4,0157 3,970 21 1,148 318 12,307 1,146 27$ 11,941 1,148 318 12,287 1.146 275 11.921 Aw)rov&J by the Coun¢il of Cor*wati￿. Company Reglstratson Number 022C6468 (England and Wale¥l and signed on rts behalf by Ui k Karen Gc4die•Morrison Chair Date. (1 pi Butterfy Conservation 34 ## **Statement of cash flows** Year to 31 March 2022 |Note|**2022**
**£**|2021
£| |---|---|---| |**Cash flows from operating activities**
Net cash (used in) provided by operating activities
A
**Cash flows from investing activities**
Investment income and interest received
Purchase intangible fixed assets
Proceeds from the disposal of listed investments
Purchase of listed investments
**Net cash provided by investing activities**
**Change in cash and cash equivalents in the year**
**Cash equivalents at 1 April 2021**
B
**Cash equivalents at 31 March 2022**
B|
**(659)**
**224**
**—**
**238**
**(306) **|259
148
(14)
6,046
(5,868)| ||**156**|312| ||**(503)**

**4,608**|571
4,037| ||**4,105**|4,608| ## **Notes to the statement of cash flows for the year to 31 March 2022** ## **A Reconciliation of net expenditure to net flows from operating activities** ||**2022**
**£**|2021
£| |---|---|---| |**Net income (as per the statement of financial activities)**
**Adjusted for:**
Depreciation and amortisation charge
Gains on investments
Investment income (net of management fees) and interest receivable
(Increase) decrease in debtors
Increase (decrease) in creditors
**Net cash(used in) provided by operating activities**|**366**
**30**
**(287)**
**(224)**
**(612)**
**68**|858
31
(649)
(148)
316
(149)| ||**(659) **|259| |**Analysis of cash and cash equivalents**
Cash at bank and in hand: current accounts
Cash at bank and in hand: short term deposits and interest bearing
accounts
Cash held by investment managers
**Total cash and cash equivalents**|**2022**
**£**|2021
£| ||**989**
**3,113**
**3**|1,435
3,101
72| ||**4,105**|4,608| ## **B Analysis of cash and cash equivalents** No separate reconciliation of net debt has been prepared as there is no difference between the net cash (debt) of the charity and the above cash and cash equivalents. Butterfly Conservation **35** **Principal accounting policies** 31 March 2022 The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the accounts are laid out below. ## **Basis of preparation** These financial statements have been prepared for the year to 31 March 2022 with comparative information provided in respect to the year 31 March 2021. The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these financial statements. The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (Charities SORP FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011. The charity constitutes a public benefit entity as defined by FRS 102. The financial statements are presented in sterling and are rounded to the nearest one thousand. ## **Basis of consolidation** The consolidated statement of financial activities and group balance sheet consolidate the financial statements of Butterfly Conservation and its wholly owned subsidiary company, Butterfly Conservation Trading Limited, made up at the balance sheet date. The results of the subsidiary undertaking are consolidated on a line-by-line basis. No separate statement of financial activities has been presented for the charity alone as permitted by Section 408 of the Companies Act 2006. ## **Critical accounting estimates and areas of judgement** Preparation of the financial statements requires the members of Council and management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include: - the estimates of the useful economic lives of both tangible and intangible fixed assets used to determine the annual depreciation and amortisation charges respectively; - the assumptions adopted by the members of Council and management in determining the value of any designations required from the charity’s general unrestricted funds; - the basis on which support costs have been allocated across expenditure headings; - the probability of the receipt by the charity of legacy income of which it has been notified of its entitlement; and - the estimation of future income and expenditure flows for the purpose of assessing the charity’s and group’s going concern. Butterfly Conservation **36** **Principal accounting policies** 31 March 2022 ## **Assessment of going concern** Council members have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. Council members have made this assessment in respect to a period of at least one year from the date of approval of these financial statements. The members of Council have considered the impact of the Covid-19 on the charity by assessing and reviewing future income streams, expenditure levels, and the level of free reserves. Following this review, the members of Council are of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due. The most significant areas of judgement that affect items in the financial statements are detailed above. With regard to the next accounting period, the year ending 31 March 2022, the most significant areas that affect the carrying value of the assets held by the charity are the level of investment return and the performance of the investment markets (see the investment policy set out in the Report of the Council for more information). ## **Income** Income is recognised in the period in which the charity has entitlement to the income, the amount of income can be measured reliably, and it is probable that the income will be received. Income is deferred only when the charity must fulfil conditions before becoming entitled to it or where the donor or funder has specified that the income is to be expended in a future accounting period. Income comprises: donations; legacies; income from fundraising events, royalties, and trading activities; investment income and interest receivable; and income from charitable activities including grants receivable, contracts for services, primary purpose trading and membership subscriptions. Donations are recognised when the charity has confirmation of both the amount and settlement date. In the event of donations pledged but not received, the amount is accrued for where the receipt is considered probable. In the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity, and it is probable that those conditions will be fulfilled in the reporting period. Donated goods are recognised at fair value unless it is impractical to measure this reliably, in which case a derived value, being the cost of the item to the donor, is used. An equivalent amount is included as expenditure except where the donated good is a fixed asset, in which case the corresponding amount is included in the appropriate fixed asset category and depreciated over the useful economic life in accordance with the charity’s accounting policies. In accordance with the Charities SORP FRS 102, volunteer time is not recognised. Butterfly Conservation **37** **Principal accounting policies** 31 March 2022 ## **Income** (continued) Legacies are included in the statement of financial activities when the charity is entitled to the legacy, the executors have established that there are sufficient surplus assets in the estate to pay the legacy, and any conditions attached to the legacy are within the control of the charity. Entitlement is taken as the earlier of the date on which either: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor to the charity 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 charity has been notified of the executor’s intention to make a distribution. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, but the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material. In the event that the gift is in the form of an asset other than cash, or a financial asset traded on a recognised stock exchange, recognition is subject to the value of the gift being reliably measurable with a degree of reasonable accuracy and the title of the asset having been transferred to the charity. In April 2020 Council passed a resolution to transfer the balance held in the designated Legacy Fund to the general fund and additionally any income arising from new legacies received in the year to be allocated directly to the general fund. Previously, an amount equivalent to the unrestricted legacies credited to the statement of financial activities was transferred to the Legacy Fund, a designated fund. Income from trading activities includes the income from corporate sponsorship and the sale of products of the charity’s trading subsidiary. Such income is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. It is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Income from fundraising events and income from royalties is recognised when it is probable that the economic benefits will flow to the charity and the revenue can be reliably measured. It is measured as the fair value of the consideration received or receivable. Dividends are recognised once the dividend has been declared and notification has been received of the dividend due. Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank. Grants from government and other agencies are included as income from charitable activities where these amount to a contract for services or where the money is given in response to a specific appeal or for a particular purpose. Grants from government and other agencies are included as donations where they are given with greater freedom of use, for example monies for core funding. Butterfly Conservation **38** **Principal accounting policies** 31 March 2022 ## **Income** (continued) Income from primary purpose trading is recognised to the extent that it is probable that the economic benefits will flow to the charity and the revenue can be reliably measured. It is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Annual membership subscriptions are credited to the statement of financial activities on a receipts basis. This approach avoids any complexity that might be encountered if an accruals basis were applied and, in the opinion of the members of Council, results in a figure that is not materially different from that which would be achieved by using an accruals basis. ## **Expenditure** Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to make a payment 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. All expenditure is stated inclusive of irrecoverable VAT. Expenditure comprises direct costs and support costs. All expenses, including support costs, are allocated or apportioned to the applicable expenditure headings. The classification between activities is as follows: - Expenditure on raising funds includes all expenditure associated with raising funds for the charity. This includes investment management fees, staff costs associated with fundraising, the direct cost of fundraising activities, expenditure of the charity’s subsidiary company and an allocation of support costs. - Expenditure on charitable activities comprises expenditure on the charity’s primary charitable purposes as described in the Report of Council i.e. conservation and membership services. This includes both costs that can be allocated directly to such activities and an allocation of support costs. ## **Allocation of support and governance costs** Support costs represent indirect charitable expenditure. In order to carry out the primary purposes of the charity it is necessary to provide support in the form of a finance function, human resources function, property management and information technology support. Governance costs comprise the costs involving the public accountability of the charity (including audit costs) and costs in respect to its compliance with regulation and good practice. Support staff costs are allocated to the above expenditure headings based on the time expended by the support staff in the relevant areas. Other support and governance costs are allocated to expenditure in the same ratio as the direct costs. Butterfly Conservation **39** **Principal accounting policies** 31 March 2022 ## **Intangible fixed assets** All assets costing more than £2,000 and with an expected useful life exceeding one year are capitalised. Amortisation is provided on cost at the following annual rates in order to write off each asset over its estimated useful life: - Computer software 20% straight-line Assets under the course of construction, including software under development, are not amortised until they are available for use. ## **Tangible fixed assets** All assets costing more than £2,000 and with an expected useful life exceeding one year are capitalised. Depreciation is provided on cost at the following annual rates in order to write off each asset over its estimated useful life: - Office equipment, vehicles, plant and machinery 20-25% straight-line No depreciation is provided on freehold land. ## **Investments** Listed investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The charity does not acquire put options, derivatives, or other complex financial instruments. The Council of Butterfly Conservation voted in July 2020 to adopt a policy of Total Return in the management of this fund as permitted by the Act and a special Charity Commission scheme. Under this policy, investment managers are given the flexibility to achieve maximum returns on investments whether this is through generating interest and dividends or through capital growth. Charities operating a Total Return policy can apply some of the capital growth on investments for charitable purposes, thereby enabling the Trustees to balance the current and future needs of charitable beneficiaries. Realised gains (or losses) on investment assets are calculated as the difference between disposal proceeds and their opening carrying value or their purchase value where the investment is acquired after the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value at that date. Realised and unrealised investment gains (or losses) are combined in the statement of financial activities and are credited (or debited) in the year in which they arise. Butterfly Conservation **40** **Principal accounting policies** 31 March 2022 ## **Stocks** Stocks of books and stationery for resale are valued at the lower of cost and estimated net realisable value. ## **Debtors** Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material. ## **Cash at bank and in hand** Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition. Deposits for more than three months but less than one year have been disclosed as short-term deposits. Cash placed on deposit for more than one year is disclosed as a fixed asset investment. ## **Creditors and provisions** Creditors and provisions 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. Creditors and provisions are recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material. ## **Fund structure** The endowment fund comprises monies that must be held as capital indefinitely. Until 30 June 2020, the investment income therefrom (which was available for use for charity’s general purposes) was credited directly to unrestricted funds, whilst any gains (or losses) on the original capital was credited (or debited) to (or from) the endowment fund. Following a resolution of the members of Council on 10 June 2020, with effect from 1 July 2020, the charity has implemented a total return approach in respect of its endowment funds. The initial value of the trust for investment and the initial value of the Unapplied Total Return were established on 31 March 2020. The initial amount of the trust for investment was determined at £3.09m by reference to the charity’s records: the Unapplied Total Return was calculated as the difference between that value and the portfolio value at 31 March 2020. All investment income, gains and losses are taken to the part of the fund representing the accumulated Unapplied Total Return in the first instance. The members of Council have agreed a policy to allocate 3.25% of the portfolio value, after investment management fees, from the Unapplied Total Return to the charity’s unrestricted funds each year, and this is shown as a transfer between funds on the statement of financial activities. Butterfly Conservation **41** **Principal accounting policies** 31 March 2022 ## **Fund structure** (continued) The restricted funds are monies raised for, and their use restricted to, a specific purpose, or donations subject to donor-imposed conditions. Transfers between restricted funds and the tangible fixed assets fund are explained below. Transfers between restricted and other unrestricted funds are explained in Note 20 to the financial statements. The non-charitable trading funds comprise the profits retained in the trading subsidiary, Butterfly Conservation Trading Limited. The tangible and intangible fixed assets fund represents the net book value of those tangible and intangible fixed assets that are not part of the endowment or restricted funds of the charity. Each year one tenth of the cost of all land purchased from restricted funds will be transferred to the tangible fixed assets fund unless there is a specific deed/covenant in place to de-restrict the asset. The charity has adopted a formal policy of assessing all assets donated, other than cash, and valuing for account purposes only those with material value to the charitable work of the organisation. The designated funds are monies set aside out of the general fund and designated for specific purposes by Council. The policies for transfers to and from designated funds are explained above under “income and transfers to/from designated funds” or in Note 22 to the financial statements. The general fund comprises those monies that may be used towards meeting the charitable objectives of the charity and may be applied at the discretion of Council. ## **Contributory third party (CTP) and landfill community funds** Funds collected as third-party contributions towards projects, which are funded by Landfill Community Funds, are not regarded as income but are shown as a liability on the balance sheet. They will be transferred in due course to the Landfill Operators to release further funds under the Landfill Community Funds scheme. ## **Leased assets** Rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are charged to the statement of financial activities in equal annual amounts over the lease term. ## **Pension costs** Contributions by the charity in respect of employees’ personal pension plans and defined contribution schemes are charged to the statement of financial activities in the year in which the expenditure is incurred. Butterfly Conservation **42** **Notes to the Financial Statements** Year to 31 March 2022 ## **1 Income from donations and legacies** |Group|Unrestricted
funds
£’000|Restricted
funds
£’000
54
—
54
_Restricted_
_funds_
_£’000_
_106_
_5_
_111_|Endowment
funds
£’000|**2022**
**Total**
**£’000**| |---|---|---|---|---| |Donations
Legacies|524
667||—
—|**578**
**667**| ||1,191||—|**1,245**| |_Group_|_Unrestricted_
_funds_
_£’000_||_Endowment_
_funds_
_£’000_|_2021_
_Total_
_£’000_| |_Donations_
_Legacies_|_557_
_683_||_—_
_—_|_663_
_688_| ||_1,240_||_—_|_1,351_| ## **2 Income from other trading activities** |**Income from other trading activities**||||| |---|---|---|---|---| |Group|Unrestricted
funds
£’000|Restricted
funds
£’000|Endowment
funds
£’000|**2022**
**Total**
**£’000**| |Sale of goods/services – non-charitable material
Royalties and sponsorship – non primary purpose
Fundraising|
20

11
16|—
—
—|—
—
—|**20**
**11**
**16**| ||47|—|—|**47**| |_Group_|_Unrestricted_
_funds_
_£’000_|_Restricted_
_funds_
_£’000_|_Endowment_
_funds_
_£’000_|_2021_
_Total_
_£’000_| |_Sale of goods/services – non-charitable material_
_Royalties and sponsorship – non primary purpose_
_Fundraising_|
_27_

_24_
_21_|_—_
_—_
_—_|_—_
_—_
_—_|
_27_

_24_

_21_| ||_72_|_—_|_—_|
_72_| ## **3 Income from investments and interest receivable** |Group
UK common investment funds and unit trusts
Bank interest|Unrestricted
funds
£’000|Restricted
funds
£’000|


Endowment
funds
£’000

225

—

225|
2022
Total
£’000| |---|---|---|---|---| ||
—
10|—
2||**225**
**12**| ||10|2||**237**| Butterfly Conservation **43** **Notes to the Financial Statements** Year to 31 March 2022 ## **3 Income from investments and interest receivable** (continued) |_Group_|_Unrestricted_
_funds_
_£’000_|_Restricted_
_funds_
_£’000_|_Endowment_
_funds_
_£’000_|_2021_
_Total_
_£’000_| |---|---|---|---|---| |_UK common investment funds and unit trusts_
_Bank interest_|
_1_
_13_|_—_
_6_|_128_
_—_|
_129_

_19_| ||_14_|_6_|_128_|
_148_| ## **4 Income from charitable activities: conservation activities – grants receivable** |Group|**Unrestricted**
**funds**
**£’000**|**Restricted**
**funds**
**£’000**|**2022**
**Total**
**£’000**|Unrestricted
funds
£’000|
Restricted
funds
£’000|
2021
Total
£’000| |---|---|---|---|---|---|---| |Defence Infrastructure
Organisation
Fidra
Garfield Weston Foundation
Grant Scape
International Union for
Conservation of Nature
Kusumu Trust
London Wildlife Trust
National Trust
Natural England
Northern Ireland Environment
Agency
Natural Resources for Wales
Postcode Local Trust
Rural Payments Agency
Scottish Borders Council
Scottish Forestry
Scottish Natural Heritage
Severn Trent Water Ltd
The Highland Council
National Heritage Lottery Fund
The Patsy Wood Trust
The Royal Society for the
Protection of Birds
UK Centre of Ecology &
Hydrology
Worcestershire Wildlife Trust
Grant received < £5,000|**8**
**—**
**—**
**—**
**30**
**—**
**—**
**6**
**181**
**—**
**—**
**—**
**—**
**—**
**—**
**1**
**—**
**—**

**—**
**—**
**—**
**4**
**—**
**11**|**1**
**—**
**—**
**—**
**—**
**9**
**—**
**—**
**118**
**30**
**9**
**—**
**24**
**8**
**1**
**61**
**97**
**6**
**423**
**—**
**54**
**1**
**—**
**14**|**9**
—
—
—
**30**
**9**
—
**6**
**299**
**30**
**9**
—
**24**
**8**
**1**
**62**
**97**
**6**
**423**
—
**54**
**5**
—
**25**|—
25
—
—
—
—
—
7
—
—
—
—
—
—
—
—
—
—
—
—
—
**—**
6
12|
1

—

10

15

—

—

48

—

484

50

—

20

40

—

6

66

—

—

207

106

75
**—**

—

4|
1

25

10

15

—

—

48

7

484

50

—

20

40

—

6

66

—

—

207

106

75
**—**

6

16| ||**241**|**856**|**1,097**|50|
1,132|
1,182| Butterfly Conservation **44** **Notes to the Financial Statements** Year to 31 March 2022 ## **5 Expenditure on raising funds** |Group|Unrestricted
funds
£’000|Restricted
funds
£’000|Endowment
funds
£’000|**2022**
**Total**
**£’000**| |---|---|---|---|---| |Staff costs (including support) (note 11)
Fundraising costs
Trading costs
Investment management charges
Other support costs (note 8)|143
49
8
—
7|—
4
—
—
—|—
—
—
13
—|
**143**

**53**

**8**

**13**

**7**| ||207|4|13|
**224**| |_Group_|_Unrestricted_
_funds_
_£’000_|_Restricted_
_funds_
_£’000_|_Endowment_
_funds_
_£’000_|_2021_
_Total_
_£’000_| |---|---|---|---|---| |_Staff costs (including support) (note 11)_
_Fundraising costs_
_Trading costs_
_Investment management charges_
_Other support costs (note 8)_|_146_
_44_
_21_
_—_
_12_|_—_
_1_
_—_
_—_
_—_|_—_
_—_
_—_
_25_
_—_|
_146_

_45_

_21_

_25_

_12_| ||_223_|_1_|_25_|
_249_| ## **6 Expenditure on charitable activities: conservation** |Group|Unrestricted
funds
£’000|Restricted
funds
£’000|Endowment
funds
£’000|**2022**
**Total**
**£’000**| |---|---|---|---|---| |Staff costs (including support) (note 11)
Marketing and publicity
Management conservation
Information and education
Legal and professional
Other support costs (note 8)|1,881
82
284
42
3
243|471
4
292
6
—
342|—
—
—
—
—
—|
**2,352**

**86**

**576**

**48**

**3**

**585**| ||2,535|1,115|—|
**3,650**| |_Group_|_Unrestricted_
_funds_
_£’000_|_Restricted_
_funds_
_£’000_|_Endowment_
_funds_
_£’000_|_2021_
_Total_
_£’000_| |---|---|---|---|---| |_Staff costs (including support) (note 11)_
_Marketing and publicity_
_Management conservation_
_Information and education_
_Legal and professional_
_Other support costs (note 8)_|_1,718_
_60_
_182_
_63_
_1_
_156_|_727_
_2_
_310_
_—_
_—_
_424_|_—_
_—_
_—_
_—_
_—_
_—_|
_2,445_

_62_

_492_

_63_

_1_

_580_| ||_2,180_|_1,463_|_—_|
_3,643_| Butterfly Conservation **45** **Notes to the Financial Statements** Year to 31 March 2022 ## **7 Expenditure on charitable activities: membership services** |Group|Unrestricted
funds
£’000|Restricted
funds
£’000|Endowment
funds
£’000|**2022**
**Total**
**£’000**| |---|---|---|---|---| |Staff costs (including support) (note 11)
Membership recruitment
Newsletter production and distribution
Membership servicing
Other support costs (note 8)|172
4
177
26
13|_—_
_—_
_—_
_—_
_—_|_—_
_—_
_—_
_—_
_—_|**172**
**4**
**177**
**26**
**13**| ||392|_—_|_—_|**392**| |_Group_|_Unrestricted_
_funds_
_£’000_|_Restricted_
_funds_
_£’000_|_Endowment_
_funds_
_£’000_|_2021_
_Total_
_£’000_| |---|---|---|---|---| |_Staff costs (including support) (note 11)_
_Membership recruitment_
_Newsletter production and distribution_
_Membership servicing_
_Other support costs (note 8)_|_167_
_5_
_148_
_38_
_20_|_—_
_—_
_—_
_—_
_—_|_—_
_—_
_—_
_—_
_—_|
_167_

_5_

_148_

_38_

_20_| ||_378_|_—_|_—_|
_378_| ## **8 Support costs** |**Support costs**|||| |---|---|---|---| ||Staff
costs
£’000|
Other
support
costs
£’000|
**2022**
**Total**
**£’000**| |Staff costs
Governance costs (note 9)
Other
Attributed to:
Expenditure on raising funds (note 5)
Expenditure on charitable activities
. Conservation (note 6)
. Membership services (note 7)|1,022
_—_
_—_|
_—_
96
509|**1,022**

**96**

**509**| ||1,022|
605|
**1,627**| ||143
795
84|
7

585

13|
**150**

**1,380**

**97**| ||1,022|
605|
**1,627**| Butterfly Conservation **46** **Notes to the Financial Statements** Year to 31 March 2022 ## **8 Support costs** (continued) |**Support costs**(continued)|||| |---|---|---|---| ||_Staff_
_costs_
_£’000_|
_Other_
_support_
_costs_
_£’000_|
_2021_
_Total_
_£’000_| |_Staff costs_
_Governance costs (note 9)_
_Other_
_Attributed to:_
_Expenditure on raising funds (note 5)_
_Expenditure on charitable activities_
_. Conservation (note 6)_
_. Membership services (note 7)_|_912_
_—_
_—_|
_—_

_142_

_470_|
_912_

_142_

_470_| ||_912_|
_612_|
_1,524_| ||_146_
_685_
_81_|
_12_

_580_

_20_|
_158_

_1,265_

_101_| ||_912_|
_612_|
_1,524_| Support staff costs are allocated to expenditure based on the time expended by support staff in the relevant areas of charitable activities. Other support costs are allocated to expenditure on the same ratio as the direct costs associated with the relevant areas of charitable activity. ## **9 Governance costs** |**Governance costs**||| |---|---|---| |Information and education
Legal and professional
Other governance expenses|**2022**
**Total**
**£’000**|2021
Total
£’000| ||**28**
**62**
**6**|28
110
4| ||**96**|142| ## **10 Net income (expenditure)** This is stated after charging: |Group|**2022**
**Total**
**£’000**|2021
Total
£’000| |---|---|---| |Staff costs (note 11)
Auditor’s remuneration
. Statutory audit services
. Non-audit services
.. Tax compliance
.. HR consultancy
Depreciation and amortisation
Operatinglease rentals|**2,667**

**15**

**3**
**—**
**30**
**93**|2,758
14
7
20
31
93| Butterfly Conservation **47** **Notes to the Financial Statements** Year to 31 March 2022 ## **11 Employees, staff costs and remuneration of key management personnel** Staff costs during the period are as follows: |Group|**2022**
**Total**
**£’000**|2021
Total
£’000| |---|---|---| |Wages and salaries
Social security costs
Other pension costs
Agency staff costs
**Total staff costs**
Staff costs by function (after the allocation of those deemed support
costs) were as follows:
Raising funds
Conservation
Membership services|**2,235**
**196**
**180**|2,362
208
179| ||**2,611**

**56**|2,749
9| ||**2,667**|2,758| ||

**143**
**2,352**
**172**|146
2,445
167| ||**2,667**|2,758| A total of £Nil was paid in redundancy payments (2021: £113,387) and this amount is included within wages and salaries above. The number of employees whose emoluments exceeded £60,000 (including employer pension contributions) was: |£70,001 - £80,000|**2022**
**Number **|2021
Number| |---|---|---| ||**1**|1| Pension contributions of £5,818 (2021: £5,818) were paid into personal pension schemes in respect of these individuals during the year. The average number of employees, analysed by function after allocating support costs, was as follows: |Group|**2022**
**Total**
**£’000**|2021
Total
£’000| |---|---|---| |Raising funds
Conservation
Membership services|**4**
**61**
**3**|6
69
4| ||**68**|79| The key management personnel of the charity comprises the member of Council and the Senior Leadership Team. The total remuneration (including taxable benefits and employer’s pension contributions) of the key management personnel for the year was £261,820 (2021: £261,170). Butterfly Conservation **48** **Notes to the Financial Statements** Year to 31 March 2022 **11 Employees, staff costs and remuneration of key management personnel** (continued) No Council member received any remuneration in respect of his or her services as members of Council during the year (2021: £nil). However: - A total of £279 (2021: £2,421) was reimbursed to (or paid by the charity on behalf of) 11 (2021: 14) Council members for expenditure incurred on behalf of the charity. - No members of Council had any beneficial interest in any contract with the charity during the year (2021: none). ## **12 Taxation** Butterfly Conservation is a registered charity and, therefore, is not liable to income tax or corporation tax on income derived from its charitable activities, as it falls within various exemptions available to registered charities. ## **13 Intangible fixed assets** |**Intangible fixed assets**||| |---|---|---| |Groupand charity|Software
£’000|
**Total**
**£’000**| |**Cost**
At 1 April 2021 and 31 March 2022
**Amortisation**
At 1 April 2021
Charge for year
At 31 March 2022
**Net book values**
At 31 March 2022
At 31 March 2021|100|
**100**| ||20
20|
**20**

**20**| ||40|
**40**| ||60|
**60**| ||80|
**80**| Butterfly Conservation **49** **Notes to the Financial Statements** Year to 31 March 2022 ## **14 Tangible fixed assets** |**Tangible fixed assets**|||| |---|---|---|---| |Groupand charity|**Freehold**
**land**
**£’000**|
**Office**
**equipment,**
**plant and**
**machinery**
**£’000**|**Total**
**£’000**| |**Cost**
At 1 April 2021 and 31 March 2022
**Depreciation**
At 1 April 2021
Charge for year
At 31 March 2022
**Net book values**
At 31 March 2022
At 31 March 2021|**1,343**|

**57**|**1,400**| ||**—**
**—**|


**26**

**10**|**26**
**10**| ||**—**|
**36**|**36**| ||**1,343**|


**21**|**1,364**| ||**1,343**|
**31**|**1,374**| Freehold land comprises a number of nature reserves managed by the charity. The disposal of a number of these reserves is subject to restrictive covenants. A legal charge dates 30 May 2006 in favour of one of the charity’s funders exists in relation to the freehold property known as Pres Heath Common. ## **15 Fixed asset investments** |**Fixed asset investments**||||| |---|---|---|---|---| ||Group||Charity|| ||**2022**
**£’000**|2021
£’000|**2022**
**£’000**|2021
£’000| |Listed investments (note a)
Investment in subsidiary company (note b)|**5,585**
|5,299|**5,585**|5,299| ||**5,585**|5,299|**5,585**|5,299| |Listed investments and cash held for re-investment
Groupand charity
**Listed investments**
Market value at 1 April
Additions at cost
Disposal proceeds
Realised (losses) gains
Disposals at opening market value
Net unrealised gains/(losses)
Market value at 31 March
Cash held by investment managers for re-investment
Cost of listed investments at 31 March|||**2022**
**Total**
**£’000**|2021
Total
£’000| ||||
**5,227**
**306**|4,594
5,868| ||||**(237)**
**(1) **|(5,865)
686| ||||**(238) **|(5,179)| ||||**287**|(56)| ||||**5,582**

**3**|5,227
72| ||||**5,585**|5,299| ||||
**5,342**|5,245| a) Listed investments and cash held for re-investment Butterfly Conservation **50** **Notes to the Financial Statements** Year to 31 March 2022 ## **15 Fixed asset investments** (continued) - a) Listed investments and cash held for re-investment (continued) - Listed investments held at 31 March 2022 wholly comprised holdings in common investments funds as follows: ||Market
value
£’000|
Proportion
%| |---|---|---| |Cazenove Charity Responsible Multi Asset Fund Accumulation units
Cazenove CharityResponsible Multi Asset Fund Distribution units|1,093
4,489|
20%

80%| ## b) Investment in subsidiary company The charity holds 100% share of the issued share capital of Butterfly Conservation Trading Limited. This holding was acquired on incorporation of the company on 23 February 2010. The following is a summary of the financial statements of Butterfly Conservation Trading Limited for the year ended 31 March 2022, which have been included in the consolidated financial statements. ||**2022**
**Total**
**£’000**|2021
Total
£’000| |---|---|---| |**Turnover**
Cost of salaries
**Gross profit**
Operating costs
**Net profit for the year before Gift Aid and taxation**
Donation under a Gift Aid compliant Deed of Covenant
Taxation
**Profit for the financial period**
Retained earnings at 31 March 2021
**Retained earnings at 31 March 2022**|**75**
**(9) **|56
(13)| ||**66**
**(17) **|43
(19)| ||**49**
**(49)**
—|25
(25)
—| ||—
**20**|—
20| ||**20**|20| At 31 March 2022 the company had total called up share capital and retained earnings of £20,0001 (2021: £20,001). Butterfly Conservation **51** **Notes to the Financial Statements** Year to 31 March 2022 ## **16 Debtors** |**Debtors**||||| |---|---|---|---|---| ||Group||Charity|| ||**2022**
**£’000**|2021
£’000|**2022**
**£’000**|2021
£’000| |Grants and other funding receivable
Prepayments and other accrued income
Legacies receivable
VAT recoverable
Amounts due from Butterfly Conservation
Trading Limited
Gift Aid recoverable
Sundry debtors|**446**
**51**
**826**
**9**
—
**140**
**8**|233
60
354
8
—
60
153|**442**
**51**
**826**
**10**
**65**
**140**
**8**|233
118
354
8
40
—
152| ||**1,480**|868|**1,542**|905| ## **17 Current asset investments** |**Current asset investments**||| |---|---|---| ||**2022**
**Total**
**£’000**|2021
Total
£’000| |**Listed investments**
Market value at 1 April
Disposal proceeds
Realised gains
Disposals at opening market value
Market value at 31 March
**Cost of listed investments at 31 March**|
**—**|162| ||**—**
**—**|(181)
19| ||**—**|(162)| ||
**—**|—| ||
**—**|—| Butterfly Conservation **52** **Notes to the Financial Statements** Year to 31 March 2022 ## **18 Creditors: amounts falling due within one year** ||Group|Group|Charity|Charity| |---|---|---|---|---| ||**2022**
**£’000**|2021
£’000|**2022**
**£’000**|2021
£’000| |Social security and other taxes
Expense creditors
Accruals and deferred income|**58**
**28**
**205**|51
97
75|**58**
**28**
**204**|51
97
72| ||**291**|223|**290**|220| Deferred income for 2021/22 related to DFN Charitable Foundation support of Big Butterfly Count of £16,667. There was no deferred income at 31 March 2021. Movements on deferred income during the year was as follows: ||Group|Group|Charity|Charity| |---|---|---|---|---| ||**2022**
**£’000**|2021
£’000|**2022**
**£’000**|2021
£’000| |Opening deferred income balance
Cash received in the year
Amounts released to income
Closingdeferred income balance|**—**
**17**
**—**|27
26
(53)|**1**
**17**
**—**|27
26
(53)| ||**17**|**—**|**18**|—| ## **19 Endowment funds** |**Endowment funds**||| |---|---|---| |At April 2021
Less value of endowment at 30 June 2020
Opening value of unapplied total return at 1 July 2021
Add investment return: income
Add investment return: realised and unrealised gains (losses)
Less investment management costs
Total return before transfer to income
Less total return applied
Unapplied total return as at 31 March 2022
Add: value of endowment at 30 June 2020
Permanent endowment including unapplied total return as at 31 March
2022|**2022**
**Total**
**£’000**|2021
Total
£’000| ||**5,299**
**(3,086) **|4,681
(3,086)| ||**2,213**
**225**
**287**
**(13) **|1,595
128
630
(25)| ||**2,712**
**(213) **|2,328
(115)| ||**2,499**
**3,086**|2,213
3,086| ||**5,585**|5,299| The Council of Butterfly Conservation voted in July 2020 to adopt a policy of Total Return in the management of this fund as permitted by the Act and a special Charity Commission scheme. Under this policy, investment managers are given the flexibility to achieve maximum returns on investments whether this is through generating interest and dividends or through capital growth. Charities operating a Total Return policy are able to apply some of the capital growth on investments for charitable purposes, thereby enabling the Trustees to balance the current and future needs of charitable beneficiaries. Butterfly Conservation **53** **Notes to the Financial Statements** Year to 31 March 2022 ## **20 Restricted funds** The income funds of the charity include restricted funds comprising the following to be applied for specific purposes: |Groupand charity|At 1 April
2021
£’000|
Income
£’000|Expenditure
£’000|
Fund
transfers
£’000|
**At 31**
**March**
**2022**
**£’000**| |---|---|---|---|---|---| |Back from the Brink Project
Big City Butterflies
Brilliant Butterfly Banks
Building Sites for Butterflies
Conservation Officer Wales
Development Scotland
Environparks Marsh Fritillary Mitigation
Kent’s Magnificent Moths
Morecambe Bay Lime
North Atlantic Coast
Regional Development Officer Northern
Ireland
Prees Heath Fund
Regional Development Officer North
England
Regional Development Officer Greater
London
Reserve Acquisition and Management
Fund
Restricted Legacies
Cornwall Atlas Project
Ryton Wood Meadow Project –
Warwickshire
Malvern Hill Lost Fritillary – West
Midlands
Scottish Borderlands
Wyre Forest
Rockingham Forest
Supporting Science
Head Office Restricted Funds where
closing balance <£5,000
Branch Restricted Funds where closing
balance <£5,000|42
33
21
84
27
11
179
78
110
8
6
281
25
20
62
198
9
14
6
—
—
—
—
15
2|
118

87

—

1

36

112

—

59

15

—

85

14

30

38

5

1

11

—

20

18

97

124

59

54

—|
(153)

(101)

(8)

(39)

(74)

(179)

(51)

(85)

(97)

—
(56)

(10)
(22)
(30)
—

(3)

(19)
(5)
(8)

—

(43)

(51)

(21)
(63)
(1)|
(5)

4

—

—

11

69

—

—

5

—

—

—

—

—

(5)

—

—

—

(4)

—

—

7

—

2
(1)|
**2**

**23**

**13**

**46**

**-**

**13**

**128**

**52**

**33**

**8**

**35**

**285**

**33**

**28**

**62**

**196**

**1**

**9**

**14**

**18**

**54**

**80**

**38**

**8**
**—**| ||1,231|
984|
(1,119)|83|
**1,179**| Butterfly Conservation **54** **Notes to the Financial Statements** Year to 31 March 2022 ## **20 Restricted funds** (continued) |**Restricted funds**(continued)|||||| |---|---|---|---|---|---| |_Group and charity_|_At 1 April_
_2020_
_£’000_|
_Income_
_£’000_|_Expenditure_
_£’000_|
_Fund_
_transfers_
_£’000_|
_At 31_
_March_
_2021_
_£’000_| |_Back from the Brink Project_
_Big City Butterflies_
_Brilliant Butterfly Banks_
_Building Sites for Butterflies_
_Conservation Officer Wales_
_Development Scotland_
_Environparks Marsh Fritillary Mitigation_
_Kent’s Magnificent Moths_
_Morecambe Bay Lime_
_North Atlantic Coast_
_Regional Development Officer Northern_
_Ireland_
_Prees Heath Fund_
_Regional Development Officer North_
_England_
_Regional Development Officer Greater_
_London_
_Reserve Acquisition & Management_
_Fund_
_Restricted Legacies_
_Cornwall – Atlas Project_
_Ryton Wood Meadow Project –_
_Warwickshire_
_Malvern Hill Lost Fritillary – West_
_Midlands_
_Head Office Restricted Funds where_
_closing balance <£5,000_
_Branch Restricted Funds where closing_
_balance <£5,000_|_19_
_—_
_23_
_60_
_—_
_43_
_209_
_—_
_—_
_7_
_—_
_274_
_47_
_48_
_93_
_199_
_—_
_17_
_5_
_44_
_3_|
_333_

_36_

_48_

_78_

_27_

_86_

_1_

_30_

_137_

_1_

_126_

_13_

_13_

_9_

_—_

_1_

_14_

_3_

_1_

_350_

_—_|
_(313)_

_(4)_

_(50)_

_(54)_

_—_

_(275)_

_(31)_

_(4)_

_(31)_

_—_
_(136)_

_(6)_
_(25)_
_(49)_
_—_

_(2)_

_(7)_
_(6)_
_—_
_(470)_
_(1)_|
_3_

_1_

_—_

_—_

_—_

_157_

_—_

_52_

_4_

_—_

_16_

_—_

_(10)_

_12_

_(31)_

_—_

_2_

_—_

_—_

_91_
_—_|
_42_

_33_

_21_

_84_

_27_

_11_

_179_

_78_

_110_

_8_

_6_

_281_

_25_

_20_

_62_

_198_

_9_

_14_

_6_

_15_

_2_| ||_1,091_|
_1,307_|
_(1,464)_|_297_|
_1,231_| The specific purposes for which the significant fund balances (>£5,000) are to be applied are as follows: ## _**Back from the Brink Project**_ A unique collaboration of eight partners to save 20 species from extinction and benefit over 200 more through 19 projects that span England. ## _**Big City Butterflies**_ Big City Butterflies will inspire Londoners to discover butterflies and moths, and in doing so will connect them with nature and their local green spaces. ## _**Brilliant Butterfly Banks**_ A public engagement and chalk grassland creation/restoration project in South West London with Wildlife Trust and Natural History Museum. Butterfly Conservation **55** **Notes to the Financial Statements** Year to 31 March 2022 - **20 Restricted funds** (continued) ## _**Building Sites for Butterflies**_ To show how built development can enhance prospects for wildlife and help reverse decline by creating and maintaining high biodiversity grasslands. ## _**Conservation Officer Wales**_ To deliver effective species recovery, target our actions and increase our volunteer capacity/stakeholder engagement. ## _**Environparks Marsh Fritillary Mitigation**_ To restore and maintain marshy grassland for the Marsh Fritillary Butterfly in Wales. ## _**Kent’s Magnificent Moths**_ This vital project will help save some of the UK’s most threatened moths by involving local people in targeted conservation action in six areas of East Kent, helping people discover, enjoy and protect the unique natural heritage around them. ## _**Morecambe Bay Limestones**_ To promote the recovery of threatened species in Morecambe Bay by embracing a programme of innovative and sustainable habitat management by embracing a programme of innovative and sustainable habitat management. ## _**North Atlantic Coast**_ Habitat restoration to facilitate the re-introduction of the Large Blue to Devon and Cornwall coastal areas. ## _**Prees Heath Fund**_ The safeguarding of the Silver-studded Blue butterflies at Prees Heath. ## _**Regional Development Officer Northern Ireland**_ To support work of our Northern Ireland Office. ## _**Regional Development Officer North England**_ To support work of our North of England Regional Conservation Manager. ## _**Regional Development Officer Greater London**_ To support work of our south-east and east of England Regional Conservation Managers to cover London. ## _**Reserve Acquisition and Management Fund**_ To purchase and manage nature reserves. ## _**Restricted Legacies Fund**_ Legacies reserved for a specific purpose. ## _**Cornwall Atlas**_ Publication of the Cornwall Atlas. ## _**Ryton Wood Meadow Project - Warwickshire**_ Habitat restoration and maintenance at Ryton Wood Meadow. Butterfly Conservation **56** **Notes to the Financial Statements** Year to 31 March 2022 - **20 Restricted funds** (continued) ## _**Scottish Border**_ Examine how species recovery for threatened species contribute to a natural capital approach to land management and inform the new agri-environment schemes in Scotland. ## _**Wyre Forest**_ Threatened species focus. ## _**Rockingham Forest**_ Conservation focused on reintroduction of Chequered Skipper and habitat management for butterflies and moths. ## _**Supporting Science**_ To improve data flow and increase participation in recording schemes. ## _**West Midlands**_ Malvern Hill Lost Fritillary project. ## _**Head Office Restricted Funds < £5,000**_ All Head Office Restricted Funds with a balance less than £5,000. ## _**Branch Restricted Funds < £5,000**_ All Branch Restricted Funds with a balance less than £5,000. Transfers between restricted and unrestricted arise for various reasons. The most common reasons are: - a transfer from unrestricted to restricted funds is made where costs exceed the income received towards a specific project; - a transfer from unrestricted to restricted funds is made where the charity has made a commitment to a specific project as part of a funding agreement; and - a transfer from restricted to unrestricted funds is made when a restriction has been removed. Butterfly Conservation **57** **Notes to the Financial Statements** Year to 31 March 2022 - **21 Tangible and intangible fixed asses (including freehold and nature reserves) fund** This fund represents the net book value of those tangible and intangible fixed assets (including freehold nature reserves) forming part of the unrestricted funds. The fund exists in order to emphasise that such assets are essential in enabling the charity to fulfil its charitable objectives. The value of such assets, therefore, should not be regarded as expendable in order to meet the day to day liabilities of the charity. The fund balance changes each period by an amount equal to the movement in the net book value of the relevant tangible fixed assets. ## **22 Designated funds** The income funds of the charity include the following designated funds that have been set aside out of unrestricted funds by Council for specific purposes: |Groupand charity|At 1 April
2021
£’000|
New
designations
£’000|
Utilised /
released
£'000|
**At 31**
**March**
**2022**
**£’000**| |---|---|---|---|---| |Branch fund
Legacy fund|210
65|
134

_—_|
(26)
(65)|
**318**
**_—_**| ||275|
134|
(91)|**318**| |_Group and charity_|_At 1 April_
_2020_
_£’000_|
_New_
_designations_
_£’000_|
_Utilised /_
_released_
_£'000_|
_At 31 March_
_2021_
_£’000_| |---|---|---|---|---| |_Branch fund_
_Legacy fund_|_242_
_1,577_|
_52_

_—_|
_(84)_

_(1,512)_|
_210_
_65_| ||_1,819_|
_52_|
_(1,596)_|_275_| ## **23 Analysis of net assets between funds** |Group|Unrestricted
funds
£’000|
Restricted
funds
£’000|
Endowment
funds
£'000|
**2022**
**Total**
**£’000**| |---|---|---|---|---| |**Fund balances at 31 March 2022 are**
**represented by:**
Intangible assets
Tangible fixed assets
Fixed asset investments
Net current assets|60
1,088
—
4,395|
—

276

—

903|
—

—

5,585

—|
**60**

**1,364**

**5,585**

**5,298**| ||5,543|
1,179|
5,585|
**12,307**| Butterfly Conservation **58** **Notes to the Financial Statements** Year to 31 March 2022 ## **23 Analysis of net assets between funds** (continued) |_Group_|_Unrestricted_
_funds_
_£’000_|
_Restricted_
_funds_
_£’000_|
_Endowment_
_funds_
_£'000_|
_2021_
_Total_
_£’000_| |---|---|---|---|---| |_Fund balances at 31 March 2021 are_
_represented by:_
_Intangible assets_
_Tangible fixed assets_
_Fixed asset investments_
_Net current assets_|_80_
_1,066_
_—_
_4,265_|
_—_

_308_

_—_

_923_|
_—_

_—_

_5,299_

_—_|
_80_

_1,374_

_5,299_

_5,188_| ||_5,411_|
_1,231_|
_5,299_|
_11,941_| |Charity|Unrestricted
funds
£’000|
Restricted
funds
£’000|
Endowment
funds
£'000|
**2022**
**Total**
**£’000**| |---|---|---|---|---| |**Fund balances at 31 March 2022 are**
**represented by:**
Intangible assets
Tangible fixed assets
Fixed asset investments
Net current assets|60
1,088
—
4,375|
—

276

—

903|
—

—

5,585

—|
**60**

**1,364**

**5,585**

**5,278**| ||5,523|
1,179|
5,585|
**12,287**| |_Charity_|_Unrestricted_
_funds_
_£’000_|
_Restricted_
_funds_
_£’000_|
_Endowment_
_funds_
_£'000_|
_2021_
_Total_
_£’000_| |---|---|---|---|---| |_Fund balances at 31 March 2021 are_
_represented by:_
_Intangible assets_
_Tangible fixed assets_
_Fixed asset investments_
_Net current assets_|_80_
_1,066_
_—_
_4,245_|
_—_

_308_

_—_

_923_|
_—_

_—_

_5,299_

_—_|
_80_

_1,374_

_5,299_

_5,168_| ||_5,391_|
_1,231_|
_5,299_|
_11,921_| |Groupand charity|Unrestricted
funds
£’000|
Restricted
funds
£’000|
Endowment
funds
£'000|
**2022**
**Total**
**£’000**| |---|---|---|---|---| |**Reconciliation of movements in**
**unrealised (losses) gains on**
**investments**
Unreleased losses at 1 April 2021
Less: in respect of disposals in the year
Less: net unrealised losses in period
**Unrealisedgains at 31 March 2022**|—
—
—|
—

—

—|
(18)

(29)

287|
**(18)**

**(29)**

**287**| ||—|
—|
240|
**240**| Butterfly Conservation **59** **Notes to the Financial Statements** Year to 31 March 2022 ## **23 Analysis of net assets between funds** (continued) |_Group and charity_|_Unrestricted_
_funds_
_£’000_|
_Restricted_
_funds_
_£’000_|
_Endowment_
_funds_
_£'000_|
_2021_
_Total_
_£’000_| |---|---|---|---|---| |_Reconciliation of movements in unrealised_
_gains (losses) on investments_
_Unrealised gain at 1 April 2020_
_Less: in respect of disposals in the year_
_Less: net unrealised losses in period_
_Unrealised losse at 31 March 2021_|_43_
_(43)_
_—_|
_—_

_—_

_—_|
_305_

_(267)_

_(56)_|
_348_

_(310)_
_(56)_| ||_—_|
_—_|
_(18)_|_(18)_| ## **24 Leasing commitments** At 31 March 2022 the group and charity had total future minimum lease payments under non-cancellable operating leases as follows: ||Land and|buildings|Other|Other| |---|---|---|---|---| ||**2022**
**£’000**|2021
£’000|**2022**
**£’000**|2021
£’000| |Within one year
Within two to five years
After five years|**60**
**155**
**16**|77
47
24|**28**
**10**
**—**|35
49
—| ||**231**|148|**38**|84| ## **25 Related party transactions** During the year ended 31 March 2022, the charity received subscriptions from Council members and the Senior Leadership Team totalling £542 (2021: £333). During the year ended 31 March 2022, the charity received unrestricted donations from Council members and the Senior Leadership Team totalling £8,625 (2021: £7,680) including gift in kind £Nil (2021: £Nil) and restricted donations totalling £Nil (2021: £200). Details of other related party transactions are provided at Note 11. Beyond these, there were no other related party transactions during the financial year which require disclosure (2021: none). ## **26 Members’ liability** The charity is constituted as a company limited by guarantee. In the event of the charity being wound up, members are required to contribute an amount not exceeding £1. Butterfly Conservation **60** **Notes to the Financial Statements** Year to 31 March 2022 ## **Get involved with Butterfly Conservation** Sign up to our monthly email newsletter, _All Aflutter_ , for the latest butterfly and moth news, wildlife gardening tips, and special offers: butterfly-conservation.org/enews. Subscribe to our biannual email newsletter, _Science News_ , to explore the wide range of science we are involved in and how we apply this to our conservation projects: butterflyconservation.org/sciencenews. We can save butterflies and moths by working together to create a better environment for people and nature. Here are just some of the ways you can help: - Donate – Every penny counts in the fight to save threatened and widespread species. Support our conservation work to secure the future for butterflies and moths. - Join – Add your voice to our 37,000+ members who are speaking up for butterflies and moths and supporting our work. Your local Branch will introduce you to the wildlife on your doorstep at guided walks, talks and conservation action days. - Remember butterflies in your Will – Every gift, whatever the size, makes a real impact on our conservation work and helps ensure future generations experience the joy of watching butterflies and moths in the wild. - Gardening – You can add pollinator-friendly plants to any size outdoor space. Provide nectar pit stops to keep butterflies and moths flying or help them raise their next generation by providing caterpillar food plants. - Volunteer – From practical conservation and repairing fences to filling envelopes, we have volunteer tasks for all ages and abilities. Give your time for butterflies and moths and make a difference. - Monitor – We identify the species that most need our help by tracking where and when butterflies and moths occur. Whether you spend 15 minutes taking part in the Big Butterfly Count or walk a regular transect route, you can contribute to our recording schemes. - Fundraise – Run a marathon, bake a cake or open your garden – there are endless ways you can help raise funds and inspire others to support butterflies and moths for generations to come. Visit butterfly-conservation.org/help for more information or call: 01929 400209. Butterfly Conservation **61**