THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC REPORTS AND ACCOUNTS FOR THE YEAR ENDED 31 JANUARY 2022 CHARITY NUMBER (EfiGIAND AND WALBS): 292182 CHARrrY NUMBER (SCOTIAfiD): SC043343 COMPANY NUMBEIL. 01926395 THE ASSOCZATED BOARD OF THE ROYAL SCHOOLS OF MUSIC REFERENCE AND ADMINISTRATIVE INFORMATION PATRON HER MLTEsfY THE QUEEN PRESIDErrr H R H The Piince of Wales GOVBRNING BODY Tony HJJe8. Chair. CBE. &Sc Frances Anderso￿ M.SOC.SqUPSI. BSC IECONI, FRSA Abdul Bbanii OBE. FCA B•rone8s Fke¢ CBE Profeswr Jonathan Freeman.Attwood CBE, Bmus, MPhil, Hon RAM, FKC, FRNCM IPn"ncipal. Royal Academy of Music} Nicola Ir4ine Leslie Kwan Professor Colin Lawson CBE, MA {Oxonl, MA. PhD. D Mus, FRCM. FRNCM. FLCM (Direetiw. Royal College of Music) Profe8sor Linda Merrick GRSM. Mmus. Pl￿. FRAM, FRCM. FLCM, FRSi H¢)n VCM, FHEA {Principal. Royal Northern College of Music) Profe&sor Jeffrey Sharkey, MPhil (Cantabl (Principal, Royal Conservatoire of Scotiandl Bronw)m Syiek, MA Icantab) Damian Wisniewski Bsc (Eng>. ACGI. BFP. FCA. UiAM CHIEF EXEcvfivB Cknis Cobb Bsc. FRSA DEpirrY CHIEF EXEcirrivE Penny Milsom BA EXECUTIVE DIREcfoL. STRATEGIC DEVELOPMEFTr Profe850r Lincoln Abiotts FRSA MBA, Advcert (PCS). Bmus LTCL CHIBF OPERATING OFFICBR Helen Coleman BA. MBA CHIEF EXAMINER Profes80r John Holmes ￿ LRAM. Cert E CHIEF DIGrrAL OFFICER James Halliweu BSC, Msc SECRETARY TO THE GOVBRNING BODY Rachael Casstles THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC REFERENCE AND ADMINISTRATIVE INFORMATION CHAIUTY NUMBER (ENGLAND AND WALBS): 292182 CHARITY NUMBER (SCOTIAND): SC043343 COMPANY NUMBEL" 01926395 TRADING NAME: ABRSM REGISTERED AND PRINCIPAL OFFICE: 4 L£Jndon Wall Place. LondotL EC2Y SAU TELEPHONB: +44(0) 20 7636 5400 BMAIL: WEBSITE: ADVISERS: Crowe UK LLP 55 Ludgate Hill. London EC4M 7JW Intwnal Audttor¥'. BDO LLP 55 Baker Street, London WIU 7EU BankeTh: Bardlys Bank PLC Level 27 i thurehffl Place, London E14 5HP Santander UK PLC 3Yd Floor. Santander H¢)use ILKI Ludgate Hlll, l￿d0ft EC3M 7R Uoyds Bank PLC 25 Gre8ham Stree( London EC2V 7HN Solldtors: Farrer & Co e6 Litico]n'$ Inn Flelds, London WC2A 3LH Broadstone Pensions and Investments Limited 100 Wood Streei London EC2V 7AN Pewlon Scheme Actuory and lttvertrnt AdTiSQrn: kn aaTk & Peacock LLP 95 Wi8more Street, London. WIU IDQ Investment Managers (Prize Funds): BlaCkRc￿k Investment Management IUKI Limited 12 ThroB￿rtOn Avenue, London EC2N 2DL THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC CONTENTS OF THE REPORTS AND ACCOUNTS Page Number Governing Botys Report IiThcoTporalin8 the Strategic Rep￿} 1-21 Governing Botys ReSpon￿￿￿1t1eS Statement 22 Independent Auditovs Report to thè Member8 and Govemor8 of the Associated Board of the Royal Schools of Music 23-26 CoMo]id4ted Statement of Financial Activitie8 27 Ba]ance Sheets 28 Consokndated Statement of Cash Flows 29 Note8 to the Account8 3M3 Pages 27- 63 comprise the financial 8tatements. THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYIS REPORT {INCORPORATING THE STRATEGIC REPORT) FOR THE YEAR ENDED 31 JANUARY 2022 The rnembcTS of the Governing P￿Y {the 'Governots'}. who are also directors of the company. present their annua] report lincorpordting the Strategic Report) for the year ended 31 January 2022. together with the audited financial statements for the year in accordance with the (Jwities Act 1993 as amended by the Charities Art 2011. They confjmi that these coJJJpty with the requirements of the Companies Act 2006, the Compan￿8 Memorandum and Articles of Assoaation and Accounttng and Reporting by Ch￿lties.. Statement of Recommended Pradice applicable to charitie5 preparing their accoutts in accordance with the Financial Reporting Standard in the UK and Republic of Ireland (FRS102). STATUS AND ADMINISTRATION The Associated Board of the Royal Schools of m￿1¢ IABRSMI is a re￿ered cbarity, numbeT 292182 IChatSty registered in Scotland number. SC0433431. and a company iimited by guarantee. registered number 1926395. established by four Royal Schools of Music for the benefit of music educatioJL The company has no share capitsl and the liabihty ofthe member8 in tbe event of vrinthn8 UP 18 limited to £1 per member. The member8 are the Royal College of Musie, the Royal Academy of Music. the Th￿teeS of the Royal Northern College of Music Endowment Fund and the TnJ8tees ofthe Royal Conservatoire ofscotland Trust. The charity h&8 a wholiy owned subsidiary company. The AsKriated BoArd of the Royal Schools of Musi¢ IPub]ishingl Limited IABPSM Publishing). the re$ult$ of ￿1¢h are cowoiidated in these fmancial statements. GOVERNING BODY, CHIBF BXECUTIVB AND MANAGBMErTr STRucfuRE For the pulposes of the Companles Act 21x16 the Governors are the direcwrn of ABRSM. They are also the charity trustees under the Ch•itie8 Art 2011. The Governing Body is con8titvted under the Artides of Association of the company as drawn up in 1985 and amended on 26 July 2011. The amendment allows for three additional independent memben toioh) the GoveTnin8 Body. Member8hip of the Governing Body eon5i3t8 oftwo person5 appointed by each ofthe Royal Academy of Mu8iC, the Roya] Co]te8e of Music. the Royal Northern Co]]e8e of Music Endowment Pund and the Royal COnse￿at0?re of Scot]and Trust. together with three independent Governor8 and a chair￿ who is appointed by the memberB. New Governor8 ore inviied to meet Governor& the Chief Eyecwtive and other Senior staff for their inductio These meetings are taiiored to the nee¢ts of each Govemor depenthng on their back8round, experience and experti8e. The Govemors irj office from l Febrpjary 2021 to the date of this report are listed below and. where applScable, their alternate th're¢tor81'Alternate8'). Gov•rno Tony Hales CBE, a Frances Anderson Abdul Bhanii OBEJ (appointed 24 November 2021) Profe&8or Jonathan Freeman.Attwood CBE Judith BarbeT (resigned 20 September 20211 Karen Di Lorenzo (appointed 5 November 2021) Jeremy Heap, (re8igned 24 November 2021) Nicola Irvine (appointed 18 Marth 2021) Leslie Kwan (appointed 2 January 20221 Professor Colin tawson CBE Professor Linda MeTtick David Roper, Deputy Chair (resigned 24 November 2021} ProfeBsor Jeffrey Shthey BrOnW￿ Syiekl Baroness Fleet CBE Damian WisniewBki. Deputy Chair Kevtn Porter 1France$ Anderson. Abdu] Bl]anii and Bronwyn Syiek are independent Governors. je￿MY Heap was an independent Governor. THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STrATEGIC REPORT) {corTriNUED) FOR THE YEAR ENDED 31 JANUARY 2022 GOVERNING BODY, CHIEF EXECiTfivE AND PaANAGEMEiif STRUCTURB (eontlnued) nan￿ & Businoss D•velopment Committee Memben Audlt & Rl•k Comn)itte¢ Members Damian Wi8niewaki, Chir (appointed 24 November 20211 David Roper, Chair ITesigned 24 November 20211 Tim Barton Abdu] Bhanii. Chair (appointed 24 November 20211 Jeremy Heap, Chair ITe8iRned 24 November 2021) Sue Baines Alan Smith Judith Barber (resigned 20 September 2021} BronW￿l Syiek Karen Di Loren20 (appointed 5 November 2021) George Whalley Eileen Maekay Iresigned 10 June 20211 John MaeLeod {appointed S November 20211 Rachel HarTiS Pr￿CeS Andernon mU￿e Educatlon Adviwry Commltte¢ Profe880r Jeffrey Sharkey. Chair Tony Ha]es CBE Natasha Baldwin Carolyn Baxendale Frances Cummings Barry Farrimond Mirander Francis Laura Gardiner Rylan Gleave Paul Harris Karen Humphreys John Hutchins Gabriel Lee TIM Pl￿ing Orphy Robinwn Jimmy ROthert￿rn Simon T0￿e Matt Wingfield R¢mun•ratlon cOmn￿tt•• M•mb•r Bronwyn Syiek. Chair Tony Hales CBE Professor Jonathan Freeman.Attwood Baroness Fleet CBE NomludonB COmn￿rt•• Tony Hales CBE. Chair Abdul BhanN OBE Professor Colin Lawson Professor linda Menlck Alternate8 are apwiinted by the Governor for whorn they act. They are endtled to attend vote and generally act on behalf of the appointing Governor at any Governin8 Body meeting where that Governor 18 not present. Alternates are officer¥ of ABRSM. Tather than agents ofappointin8 GovernoT& They are therefore subject to all tenns and conditions. other than remuneratiorn t￿$t]ng with reference to other GovernorA. Key Personnel The Govern(rs delegate the day-t￿aY management of ABRSM to the Chief Executive. and through him to his team ofsenior execuuve staff. who compnse the key management peT8onneL' Chtis Cobb, Chief Executive Penny Milsom, Deputy Chief ExeC￿]Ye Professor Linco]n Abbotts, Executive Director. Strategic Development Sue Carnbridge, Executive D1￿CtOr. Finance & co￿Orate Services (Resigned 30 June 2021) Helen Coleman, ChiefOperatin8 Officer James Hailiwell. Chief Di&tal Officer (Appointed 6 Apnl 2021) Professor John Holmes. Chief Examiner D•cision ma￿￿8 ProposaL8 for developing ABRSM'S work are discussed and refined by this senior teAm. Where appropriate they may be reviewed by one of the specialist comM￿eeS of the Governtng Body. which include the Music Education Advisory Cornmittee. The Chief Executive presents key policy and strategic proposals to the Finance & Business Development Committee. which reviews the financial irnplications of all proposals, and to the Governing Body for consideratiofL If agree4 these wffl be inco00r￿ed into the planned activitie5 of ABRSM. Page 2 THE ASSOCIATED BOARD OF THE ROYAL SCHOOIS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STrATEGIC REPORT) {CON￿NuED) FOR THE YEAR ENDED 31 JANUARY 2022 COVERNORS, CHIEF EXECUTIVE AND MANAGBMErrr STRUCTURE (continued) D•ctslon Maklng [￿n￿med) All aspects of ABRSM'S work in 8UPPOrt of its ch•itable obj'ective8 are bTW together in a Corporate Plan which. together with financial projections. is monitored by the Senior Management Team and considered by the Finance & Business Development Committee and then the Governing Boty. The Cory)orate P]&n sets out the strategi¢ direction for ABRSM in the medium term which is then communicated to all staff. The Finance & Buslnes5 Development Committee is also regponsible for the review of the forecast. budget and management accoun￿ It meets four time6 a year and nx•nitOT8 the thwiees of ABRSM ¢)n behalf of the Governing Body. It exercises oversight of the ffijndmg strategy and re]ated policies. The Committee will evaluate bLLsiness c￿8 for itivestmeni and monitor their benefft8 and Rol. The ￿e & Business Development Committee comprise8 UP to six mernbeTS.' The Chair who shall be an ABRSM Tn18tee: one independent Governor. up to two membeT8 CO•ted by the rnember8 of the committee with relevant 8kllls and experience 10 5UPPOrt the ABRSM Btrategy and two Royal School8 of Music Directors of Flnance. One of the )5ts on the Finance & BuBine68 Development Cornmittee is cunentty vacanL The Audit & Risk Commlttee oversees risk management behalf of the Governing Boty and meets three tsmes a year. It provides assurance to the Governing Body on the effe￿iVenesS of risk rnanagement. control and governance arrangements. It a]so meets with b)th the external and internal audhoT8 to discuss the flndin88 and recommendations from the audit reports. The Audh & Ri&k Committee compri8e8 six member8.' two Independent Governorn. two ABRSM GovemorB from two of the Royal Sth￿Is and two Dlrector8 of Finance frorn the other two Royal Schcrf)Is of Music. The Audii & Rtsk Comnuttee require8 tha¢ at least one member should have rece￿ audfii andlor finartd￿ acLvJntlng experience. ABRSM procure8 its Internal Audh seTvlee from BDO LLP. The work of the Internal Autht 8eNrfee Is Inforn]ed by an analysi5 of tisk8 to which ABRSM 16 expoBed and an annual iniernal audit plan is based on thi8 analy8i8. The Audit & Risk Committee approveg the internal audit plaTh BDO LLP 8ubJnit regu]ar reportB to the Audit & IIiBk Committee on audits conducted. risks identified and management's re5pon8e to their finding8. as well 48 their independent opinion on Internal c¢)ntroL The Nomination8 Committee ts respOn￿￿e for advtsin8 the Governing Wy on the ap￿Ints￿ent of its member8 and Its committee& The Music Education Advisory Committee is Te4)ortsJThle for advising the Senior Management Team and Governing Body on the direeti¢)n ofABRSM's educationa] programme8 ond tmpaet and for assisting ABRSM in eftsuring the musical tntegrity, qua]ity and relevance of ABRSM'¥ offer in the context of a contemporary global landscape. The Remuneration Committee 18 re8poD•Ne for deterniiw in)plementing the remuneration policy ofthe senior personnel. In doing so ti cowiders remuneration trend8 across ttJmp8Table in8titution8 a8 well a8 The remunerntion of the senior execLrtive 8taff 18 detennined through the completion of perfornjance related assessments in line with company policy. The level is determined by evaluattng coMbinat￿n of performance and maTket Tate. ABRSM'S Bovernance is structUTed around the principles of the Chatity Govemance Code. The Governing Body is committed to reviewing its governa￿e a8aiDSt the Code's piinciple8 on a regular ba￿ to ensure the highest Stand￿d$ of governance. Governon, and Offlcers. Llablllty Governors. liabi]ity is induded in the combined b￿lTresS insurance policy and 18 purchased by authority contained within the Memorandum and Artides of A&8ociation. as pernlftted by Section 23212) of the Companies Act 2006 and with the agreement of the Ch￿lty commi￿1X￿ The total c05t of Governor8. and Officer8, liabllity insurance was £2.10012021: £2.100). Page 3 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STRATEGIC REPORT) (COWllNUED) FOR THE YEAR ENDED 31 JANUARY 2022 CHARITABLE OBJECnVES ABRSM has the fol]owing aims and objectives 8et out in its MemoTandum and Articles ofAssociatlo to advance the wts, 8eience and skll]8 of music. speech and drnm) throughout the UK and overseas: and to promote the education and instruthon I￿ the study and appreciation of music, speech and During 2021. ABRSM developed and irylemented a new 5-year eoTPOfate strategy centred around our ongoing mission to enrich lives by inspiring musica] achievement around the world. A focus on the needs of our Customers is at the core of our strate￿. wh.ch is a]so guided by five key themes.. edUCatior￿1 excellence: collaboration: leadership and advocacy. equaliry. diversity and inciusion.. and. 8UStainability. Over the next five years. ABRSM afin￿ to be seen by our #akeholders t Va]ue and support our learners aod teathers Be an innovator in music teachi￿ learnlng and as8esment Support and promote music education giobally By January 2026 we ￿11 have grrni: The number ofleamers engagin8 with us Our charitable donations The breadth ofour 4Ctivitie8 The foJ]owing report explains in more detail how our objectivt8 are achieved. Our main measurements of 8ucces8 continue to be the level of candidate numbers and turnover, the delivery of key tArgets for the launch of new product8 and services. dI￿allY and in person. and reducing our carbon footprint. Additionally, the impaet of the global pandemic in 2020 resulted in an incre48ed focus on re8toriDg the company'8 ca8h Te8erve8 and strengthenln8 its resilience. STRATEGIC REPORT PRINCIPAL AcfivETIES ABRSM SUPFQrts the teaching and learning of music. in pwtneT8hip with four Royal Schools of Music and aims to insptre aehlevement in music. The strategles adopted by ABRSM to meet its charitable objectives and thereby provide public benefit focus on four main areas of activfity are: To support and recognise excellence in musie teaehing: 2. To expand and enhance the w&ys we support and assess mudea] progression., 3. To partner strategically to support. deliveT and advocate for excellence and participation In musi¢ education,. 4. To protect the planet for future generdtions. The Governors believe that the8e activitie8 continue to meet ABRSM'8 chariLgbJe objectives both in the year under review and Into the ￿ture. ABRSM'8 8ub8idiJry, The A￿cIated Board of the Roya] Schools of Music tPublishlng) LimiteLt is engaged In the production and sale of mLL8iC publications. recorthngs and digital resources in support of the charitable aetivities of ABRSM. both of exam related publications. and wider repertoire music and text-Lx)oks supportiti8 music education. Page 4 THE ASSOaATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STrATEGIC REPORT) (coriTtNUED) FOR THE YEAR ENDED 31 JANUARY 2022 STRATEGIC REPORT (conthiued) ACHIEVEMBwfs AND PERFORMANCE ABRSM uupports teacheT8 worfdwide by developing piinted and diwl resources that eomplement our exam fo¢u88ed books. recorthngs. apps and video& and thr￿ a ran8e of online and face-to-face events and quaNfi¢atio A calendar of webinar activity was delivered throu8knut the year. reaching over 10.000 people. focussin8 on Introduclng the Perfornjance Grade5 and ARSM in 18 webinars. Another 25 bespoke presentations and INS e85iOTLW weTe curated and de]ivered for partner OTg8nisations, scbools and m￿le service5 around the world. Since Identi￿ng teacher development a8 a priority are&. the Academic Director and Teacher Development Executive have collaborated to establish an ABRSM-cl￿oMIsed M(x)dle site. with a virtual café and gallery space designed to foster a sense of ¢ommurrity acting as a notional entry 8pace to the learning area. where a variety of CPD cour8e8 wal be available. Further development plans in 2022-23 are currendy underway in COllabor￿)0n with Commercial Team collea8ue8 to brin8 the Moodle site to a wider audienee. This year 8180 Saw the de8i8n and build of a xcond Future Le4rn couY•e ba8ed around POBt.pandemic reflection, to provide PTO8ression for the 28.Crf)O learners from over 170 markets who engaged with the first Future Learn course. and potentially a bridge to our own Teacher Development Programme in the fijture. A pilot of a modu]e in reflective practice was developed on our Sandbox Mcrtxlle site, with partner Titus Leaming. Th18 wa¥ wcce8shJi. with content bwlt. delivered and evaluated and Mryth good feedback. The core activity of ABRSM. de]iverln8 llML81c exams of a con8i6tentty high quAlity t￿h in the UK and internatlonal]y, contSnued to be affected due to re8tTlctions pirt in place a8 a rewlt of Covid-19. Durlng the year we continued to expand our offer of alternative and new fonnat on]ine exAminations appToved by Ofqual to meet our le8rner8' needs both in the UK and intemAtionally. There weTe 425.000 {2021.. 218.000) ABRSM &￿eSsments In 2021-22. an in(yease of95.(Ph on the Prior year. Although we were able to offer face to face prnctic418nd in person theory exams in the UK. we were unable to offer a $ignificAnt number of these Internationauy due to soveTnrnent reBtrictions. However. we were able to offer our new suite of regulated exAmiDatton¥. the Perf0M￿Ce Grades, launched in 2020. and available for all exS8ting Subjects from Grades 1-8. For these examinations learners make a video recordin8 of themselves playlng, which 18 then upl(Aded to * Secure website and marked remotely by an ABRSM examiner. Performance Grades are equivulent in level of rigour and difficulty to Practical Grades and learners can switch between the two to progress throuth 8Tade3. In addition to this. a baIly 'On Demand. rnodel for candidate5 taking their Grades 1-5 Music Theory la￿ched successffijlly in August 2021. on Schedule and within bud8et. A5 an agreed stTate8ic priority for 2021. the Theory On Demand rroD} project, was mobi]ised to deliver a scalable On Dernand solution for UK and Inten]ationaJ candidates a8 well as to provide a core platform to de]iver fijture on demand products. M¢)8t of ABRSM'S qualificatioro are forn]olly recogwsed by the UK ¢walifications Tegulators: in England by the Office of Quaiifi¢ati¢)ns and Exatranation¥ Regulation (Ofqu8Jl" in Wales by Quaiificats"ons W8le$' and in Northern Ireland by Councfi for the Curricu]um. E%amin8tion8 and Asse5srnent ICCEA Regulation). All ow regu]ated qua]Jfication8 are li#ed on Ofqual's Re￿eT of (J4lifieati¢)ns. The Governing Body is re￿OnSIble for overneeing ABRSM'S compRiawe with the conditio￿9 of recw)itk)n as set by the three regkn. Page 5 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE STRATEGIC REPORT) (coTrrJNUED) FOR THE YEAR ENDED 31 JANUARY 2022 ACHIBVEMENTS AND PERFORMANCE (continued) Uxand Ir¢land examinallo During 2021-22 8 total of 204.000 12021". I28.0￿) assessments were Completed for ABRSM'S Practical. Perfornwiee Grade, Diploma. Theory and Music Medals qualifications in the UK and ITeland, an increase of 59.4*A on the prlor yeaT. Due to Covid-19 restslctlons the UK 20218e88ion for face-tLFface Practical grades between January and March 2021 was ¢8ncelled. and hivate Visits were redueed Session8 later in the year were able to go ahead. albeit with a ￿igh￿Y reduced number of Pub]ic Venues. Online Theory Grades 1-5 wett avallable to candidates on thTee selected dates in March 2021 and then an On Demand exam window opened succe8sfully on 26 May and ran until 23 Jwie. Paper-based Grade &8 Theory exanu were dejivered on selected dates in 2021. On 2 August 2021 a fr￿ly 'On Demand, model for Candid￿e9 taking their Grades 1-5 Music Theory lauttehed and is now the maln route for these exams. A88essments completed in Scotland make up 2.￿ of the total12021'. 4.49hl. We alm to retain and attract candidates through a variety cl corporate 8tratewe8 inc]uding the release of and refreshed qua]ificatOons and increasing customer engagement capaaty along with new publicatlons and digital learnin8 &PP8. We are assi8ted In delSverin8 our examinauon8 by voiwiteer Honorary Local Repre8entative8 IHLR81 who give their valuable tlme io help atran8e and ensure the ￿T￿0th numing of exams in the UK. At the end of the year we had 194 HLR8 assisting ￿ In these Tole8. Durin8 the year 59 HLRS stepped do￿1 and 17 HLRS were newly reuuited. IAternatloft#l *x#mlndllons During the year a tot8] of 221.000 12021.. 90.0001 international assessments were eompleted for ABRSM, Prartical, Performanee Grade. Diploma and Theory qu8Jification8. an increa8e of 145.6% on prior year. Covid-19 continued to impact ¢)n the delivery of face•tOvface exam8 in inte)n&tional markets. We were able to Practical Grades in a limited number of markets induding Spain and Italy in November and December 2021. A sma]I cohort of candidate8 tcok Practical exams in Malaysia in January 2022 using a newty developed Facilitated Examiner rnodel. Six iDe4lTry Trained examineT8 In H¢)ng Kong and Slngapore exarnined 415 candidates in December 2021 and January 2022. Performance Grade exams ftyst offered to our internationa] markets in January 2021, have proved to be particu]arty popular dwing the year, as an ahernattve to the face to face exams. o￿tne Theory Grades 1.5 wtTe available for the same window as for UK candidateB between 26 May and ran until 23 June. This offer was for all territ¢xies except China and there were some capacity lirnit5. From August 2021. in line with the UK, Intemats'onal Candidates now access the 'On Demand, model for candidate8 taking their Grades 1-5 Music Theory. Paper-ba8ed Grade 6-8 Theory exanu were delivered to most tenitorles on Selected dates in 2021. At year end we had 12912021: 117) international representatives. coverAll8 76 countrles. Page 6 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODVS REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 ACHIEVBMEiifs AND PERFORMANCE (continued) Supportfv learn•rA olmwk This year saw the release of a new Woodwind published ia July 2021 for use from January 2022. The Syllabus contains more pieces by comp08ers from underrepresented groups. duets. removal of solo requirement and rea]]￿Ing of li#& Our Singing for Mulical Theatre suite was completed in January 2022. wlth aural tests and 8ight-singi 8pe¢ifical]y designed for Mu8ical Theatre singers completiti8 the sulte of both Perforniance and Praetle8] Grades up to Grade 8. The repertoire lists have once again been extended this time with a Speciflc focus on diversity in both composer background and onthge personae. Dev•lopment olpubltshed and dI81t￿r•s¢41r Following the introdU￿10n of Online Theory in August 2020. we began to offer these exanu partially on demand in May 2021, and then fuity on dernaTJd from August 2021. This included translation of papeTh into 6 lang(￿se8. devi8ing a new bulk upload process to 8UPPOrt thii functior4 and developing new conteni wlth amended que8tior Publi8hlng turnover for the yeor (including intra-8roup charges) was £6.833.000 {2021.' £7,618,000). The decrease in turnover compared with the prior year related to the new piano syllabu8 released in 2020. The Publishing Company resu]ts (including irATa-￿Oup char8e51 PToduced a aid payment of £755,00012021'. EI.309.0(K)I to ABRSM Th18 year saw the continued development and inWroveme￿ ofow ran8e ofapps itieluding.. An Awal Trainer App update to top UP Lxjntent at GTade8 1-5.. New syllabus repertoire added to our Flute. aazinet. and Saxophone Practice Partner Apps,, Viohn Sca]es Trainer App redesi8ned to match our Piano Scales Trainer App Are￿11b￿lty and Onlln• Re¥ourc In addltion to our examination related on4ine too18. we continue to develop cwr suite of re80wces for teachers via the website along with f&Ce-t￿fa¢e internctio ABRSM'S website features loca]i8ed eontent for every county in wkllch we operate •nd respond8 autornatica]ty to each vi8itoV8 1(xation in order to provide local exam enty. contact •nd event Inforn￿ti0￿ Dwing the year to 31 January 2022 we had over 8.687.000 {2021: 6,716,0¢)O} visits from over 4.269.000 {2021.' 3.100.000) uniqje vigitot8. ABRSM, workin8 dose]y with Pwc. continues to develop and its￿ement the organi￿tion'S ambitlous digital trankntion PTO8Tarnme. The next phase of deveIt)ptY￿I and cO￿lnuoUS ImprOve￿￿t WLrk. including planned CRM developmenL together with improvements to website content and design, were injplemented to improve the customer expeTience ag weu as reduce the volume of cu8torner enquiiies. Page 7 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STRAfdGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 ACHIEVEMENTS AND PBRFORMANCE {eonthiued> Partnering strategically to Suppo￿ deliver and advocate for excellence and partldpatlon in music edtteatlon Due to its finanei818ltuation, ABRSM was not able to make substantia] charitable contributions ￿ $UPPOrt the work of four Royal Schools of Music as it had done in prior years. Nevertheless, ABRSM maintained schola￿lp8 for UK-based and international students of the Royal Academy of Music. the Roya] College of Music, the Royal Northern College of Music, the Royal Conserwatoire of Scotland, the Royal Welsh College of Music and Drama and the Hong Kong Academy of Perfonning Arts. A total of 8912021.. 911 scholars benefited from ABRSM fvnding during the year. Sponsorship and donations lor the benefit of music education arising in the yeaT to 31 January 2022 were £201.00012021'. E244,0001. SCI￿1a[Ships awarded totalled £1.086.000 {2021'. £1,048,000) and induded.. Roy•lA¢ttdemy afmuslc Supported by an ABRSM Scholarshlp. Annemarle Federte studles the French Hom at the Royal Academy of Music with Rj'ehard Watkins, David Pyatt and Martth Owen. At the age of 17. AnnemaTie won the Brass Category Final of the BBC Young Mu8ician competition. In 2021. she won joint fiT5t prize at the Gianni Bergamo Classic Music Award and was a 8emi-finalist ai the ARD International Music Cornpetition in Munic14 perfoniiing Mozart Hom Concerto No. 4 with the Munich Chamber Orchestr& Other recent highlight6 include perfOrn￿nCeS ai Lichfield Festival and as 8010i8t with the National Youth Orchestra of Great Britain at Royal Festival Hal], as well a8 recording chamber music with Three World Records. Throughout 2021, Annerrwie perfornied recitals across the UK a5 well a8 concertos with European Unlon Chamber Orchestra. London Repertolre Orehestra. amn8 others. Annemarie is gratefijl for ABRSM'S Benerous support and says. '1 have had an incredible time at the Academy so far and l am really looking forward to the rest of my years here. The Academy has really helped me to impTove as a player. leading to opportunities such as playing In a patch wlth the Aurora Orchestra on PrlncApal Horn In Beethoven 7. or playing Third Horn with the London S￿TrphonY Orchestra in December 2021. 1 would ]ike to thank ABRSM for supporting the Academy and individuals like myself and enabling ow generation to continue the music industy.. Royal College ofmuslc Alim Beisembayev is a Master of Perfornwnce piano oiudent currentty in hi8 second year at the Royal College of Music IRCMI. In September 2021. A]im won the First Prize at the prestigious Leeds Internation8] Piano Competition. In Aiim's words. A]though many star5 had to be ￿Igned to reach thls success, I believe my Significant ABRSM funding played a big role in my achievernent. ABRSM'8 financial help enabled rne to support myself in London, which allowed me to completely focus on my studies. and l strongiy believe this contributed to my 8ucceBS.' Since his competition success. Alim has had an exciting time being taken on by management company Askona5 Holt, and an EP with Warner Classics was released soon after. Following hi8 8ucce88. Aiim played concertos with the Royal Liverpool Philhannonic. BBC s￿PhonY Orchestra and rn08t recently SWR Symphony Orchestra in Stuttgart. Alim also took on other engagements such as Mozart's C minor piano concerto with the BBC Symphony Orchestra with a week's nofice. as well as stepping in to perform a lunchtime recital at the Wi8more Hall in December. In January ZOZZ. Aiim perfomied with Sir Antonio Pappano and the RCM Symphony Orche8lra Ravel's piano concerto in G major. Aiim has been able to rise to the challenges of combining a full perfonnanee schedu]e with fiffl-tllne sbjdies with supw)rt from the ABRSM and RCM. Mthich he feels lucky to have at this important stage in his professionai developmenL Alim thanks the ABRSM for its huge generosity. a3 this allowed him to chase his dreams of becoming a concert pianist. Page 8 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF Trtusic GOVERNING BODY'S REPORT (INCORPORATING THE STRATEGIC REPORT) (COWnNUED) FOR THE YEAR ENDED 31 JANUARY 2022 ACHIEVEMEKfs AND PERFORMANCB (continued) Partnerlng strategically to #upport. dejiver and advocat¢ for exeallollee and participati¢)n In muslc educatlon (eonthiued) Roy•lNorthvR Coll48e oAM¥¥k Aaron Peters is a first-year Bmus voeal and opera scholar from the UK who has immersed hirnself in a]] areas of study with great enthusiasTh He has L￿en part in perfom)ance ¢]asses at every opportunity and was fortunate to attend a masterdass given by Sir John Tomlin￿￿ During the course of his singing lessons he bas Consistently improved his voca] technique and •callnula¢ed a vaTiety of new Tepertoire. and has a bright future ahead of him. Marcelo Rodrigues is on(*her first-year sclM)lar. came to the UK from Br￿1 with very ]imited financial Tesour¢e8 to study the double bass at the RNCM. He has scored hi8h]y in hi8 assessments to date and has made 8trong Strides forwards under the guidance of his tutor. eager to make the very most of hi8 ABRSM scholaTship. Royal Cowrntolm olS¢o¢14nd Dominika Dawidowska is a classica] guitarist from Poland currendy enrcdied in the fourth year of Bmus at the Royal Conservatoire of Scot]and. DoMin￿a has been able to experience a varied student ]Ife surrounded by a team of great teachers and her tslented dassmate$. She has perforn)ed in many 8010 and chamber music events during the past four years, highh'ghts have induded playing at the COP 26 confeTence when it was in Gla$gow in 2021.. she )180 worked with many distinguithed musicians. ABRSM fijnding has enabled Dominika develop into an excellent young ortist wl)o has floutished. despite the intemwtion of the pandemic and one who looks forrtard to a life on the worfd'8 coneert 8ta8e Oth•r Supportfvrmurfc Ed4¢a¢lon We have continued to work doBely with partn¢r8, policy and decigion maker8 to 8UPPOrt the plaee and pury)08e of music. and of pro8re88ion within rnu8ic education dwing a very challenging year for teaehers, learner8 and musAci4ns generally, We continued our research into the state of music maknng and learning cuknimting In the publication of our Makin8 Musie researeh report in November 2021. Working to a brief from the Departsnent for Education and directed by its Eyrt Panel of teacher8. academics and music education specialists, we fuffilled our role as drafter8 of the Model Music Curriculum for Eng]and, a non-8t&tutory guide to school mu8ic learning for ￿ pupfi8 between 5 and 14 years of age. Initiatives ftmded by our Elevate Fund were stalled by the pandemie but Testarted in January 2021. Infornied by the findings of The Music Cornmission (published in 20191 they will hjrther develop our network and institutional knowledge ofways to 8UPPOrt PTO8res8ion in the rnost effective way. We have continued to deliver against the commitinents made in ow Diversity & Inclusion Plan Ipublished in October 2020) which sets out expliat goals, supported by measurable targets, to broaden the music we Pro￿￿)te, commission. and pub]ish. in order to recogDise the rid￿e&S of diverse music 8nd our global identity. to acknowledge cultura] diverw. and include comp09ers from every 8eLtion of80eiety. Despite the various lockdoTrvlls and ban on international travel. we found ways to collaborate to make m￿lC and bring the joy of music to our audiences. We offered inspiration and advice ftir learners, teachers and parents through the Pluy On platfoTrn on our website and our Global High Scorets Concerts have brought together perforn)ers from across the globe. We celebrated Make Mtisic Day through a newly commissioned film celebrating the power of music to brin8ioy and ts) unite comn￿tie Page g THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STrATEGIC REPORT) (Co￿NUED) FOR THE YEAR ENDBD 31 JANUARY 2022 ACHIEVEMEKfs AND PERFORMANCE {conthiued) Partnerln£ 8trategx¢ally to suppo¢ deliver and advocate for excellence and partlcipation In mu81¢ ¢a￿all0￿ (contlnued) We continued to support organisations thrcmjgh the pandemic. DuTing the year we continued our partnerships with the National Youth Orchestra. the National Youth ChoiTS of Great Britain. the ROY￿ Philham)onic Society. the London Mu81¢ Fund. Nationa] Youth Jazz Orchestra. National Children'8 Orehestra of Great Britain and the Nationa] Open Youth Orchestra. Our sponsorsbip portfolio continues to reach a diver8e range of musie learners as we look to expand our geographic3] and social readL We also continued to support the Commonwetthh Resounds, the Commonwealth International Composition Award. which seeks to promote composib'on h¢ros$ the globe for under 18, . Our International Sponsorship Fund supported organi8atiOJ)8 and projects in Haiti. Kenya, Mexico. the USA and Brazll. The ongoing cha]lenges of the pandernic resuited in some changes to planned activity, including timeframes. but all pro8rammes have been able to use the ffiJndu￿ to provide opportunitie$ for children. young people and adults to make. and progre$s. in music. Activtties included a joint teacheT training programme between organisation5 in the USA and Braa1. serving more than 100 stsing teachers in Rio de Janeiro State, as well as a scholarships PTO8ramrne ft)r women musicians in Kenya attending conservatoire. Prlz• F¥n The endowment fvnds were e5tabli5hed to provide PThze8 for M￿￿eal achievemen¢ in ABRSM'3 examination& All Investment$ have been acquired in accordance with the power8 avallable to the Governors. Fundwlsthz The organisation dsxs not en8a8e in fundrai51n8 activities. Its income is derived from music examination fee8 aud from sales of associated publication Protecdng th¢ planet for futurn 8eneratlon8 We recogtu'$e a climate emergency is happening. A8 a globa] org8nl8ation brln*ng muslcai achlevement to a young audienee. we will engage our ￿aff and the wider ABRSM community to protect the planet for fvture generations. We will adapt how we operate to reduce our impact on the environment and our long tetin goal is to cut our carbon emissions in ha]f by 2030 and reduce them to net zero by 2050. In 2021 we carried out a carbon audit of our activities and began to plan a series of projects over the next three years that will help u8 to manage our GHG emissions against taTgets that track the aims of the Pari8 Agreement on global tempeTature rise. Pagè 10 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STrATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 FINANCJAL REVIEW The c¢)n801idated Statement of finanelal activities i8 given on page 27 of the accounts. Total turnover of ABRSM and its UK thidiary from exami￿nI publication8. teacher 8UPPOrt and inve8tment incorne for the year amourrted to £42,498.1XIO12021: £23,397.000). The operating profit for the year was £7.428.000 (2021 Restated: deflcit of £6.099.000). The IneTease 1$ due to the partia] lifting of restrietions on face to face exaniinatiow as a re8uIt of Covid-19 and the continued 8ucces8 of OUT onllne exami￿tion& The perfQrnW￿e of the puNishing company 18 set out in note 6 to the accounts. The profit is ststed after charging £2.722.000 {2021 Restated.. £2,002.0001 of amortisation co3ts in line with ABRSM'8 policy regardmg the capita]isation of soliware developrnent costs (note 21). The d?gital transforn]ation programme enabled ABRSM to de]iveT Customer 8elf-8eTvice in addition to offtiing both praetica] and theory examitution8 online. theTeby eon8ideTably mitigating the potentia] in)pact of Covid-19 on the financial strength and future perforn]ance of the Group. Expenditure on the digit81 transfom)aiion pro8rarnme had been treated as expenses when incuTred Sn previous years but the accounting wlicy ha8 been changed and a prior year adjustment been induded in thi8 yearfs accounts the detslls of whieh are set out in 40. The Covid-lg pandemic continued during 2021 with re8trietions on travel and indoor gathering$ Still in place in numeTOU8 countrie8 acr0$8 the world. Global travel restrletlons rtduced the abi]ity of examiner8 to travel to the vast majority of intemats'onal territories. Indu(bng ABRSM'S major rnat*et& However, the Group was able to recover its income levels in 2021 to 74% cl pre pandemic levelp and return our annual results to a profit by delivering the following actions.. Development of our on]ine assessm￿ b88 eontlnued at pace. with On Demand Theory exam5 offered from May 2021 and On Demand Perforn￿e Grades cunEntly under development. The international rolE-OUt of the new online booking service and relaled IGME 8y8t•m5. continued in 2021 with customers in a]1 target countries. apart from a)ina, usin8 the new online 8erviee by Ap7il. ABRSM continued. on a Ilmited basis, io particl￿te in the Government's Job Retention Scheme for Staff role8 relating to ABRSM'S office space. ABRSM'S offices were dosed through to June 2021 and staff and the Mryder W￿￿Orce of examiner8. contrit*Jtors, representatives and volunteers continued to worfc etTectively online when necessary. There is strong demand for the new dl8itsl assessments.. PerfOrnI￿ Grade8 and Online Theory. Pract5cal examinations are now bein8 offered in the UK together with practical examination visits which have been taking place throughout the year. The imprnvin8 financial position of ABRSM. refierttng our continued Tecovery from Covid, and the changing operational model introduced wrth the intetnational online booknng syste￿ can be seen in the results in the balance sheet at 31 January 2022. Wlth the Introduetlon of the online bcoking 5yStem and related receipt of inoyne to the UK, international debtor levels from Repre8entatives continue to reduce £1.136.000 {2021 E2.130,0001. The increased cash receipts and impToved fjtiaftci￿ Stab￿lty have a￿OWed w to increase the level of cash held on deposit to £6.968,000 (2021 £1,631.000)- Durlng the year ABRSM made a pa￿errt on acccfimt of £6m to the ABRSM pension scheme. The pension 8cheme is able to earn a higher level of return on investment than ABRSM ean ach]'eve so thi$ will support the future reduction of the pension deficit. Haw tsken this into aecount. the liquidity of the charity has nonetheless improved with cash at 31 January 2022 beitig £2m higher than forecast in November 2021. reflecting the imprnved outturn and enabling the ck)aTity to continue investm8 in its digitsl infrastrncture and internats.onal development. Page 11 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STRATEGIC REPORT) {COFTfiNUED) FOR THE YEAR ENDED 31 JANUARY 2022 FINANCIAL REVIEW (continued) The level of creditors due within one year have increased to £10,227.000 {2021 £7.995.000). As a resu]t of the Chan￿ng examithon booking process. ABIL8M is now required to make commission payments to our Intemationa] Representatives after the year end and the amount due has risen in ]itie with income to £2.057.00012021 £1,185.0001. Further evidence of the knft]ng of restiictions on face to face exorninations in the UK and the continued success of our online booking system worldwide is reflected in defeTTed incrm)e. This is income received from examination botikings relating to a peyiod after the year end date and has risen 10 £3.069.000 12021 £I.847,0￿). GolD8 Conc•rn The 8tron8 performance of the Group durin8 the year ended 31 January 2022 has provided a firni foundatloft for the forthcoming year. A budget has been 8ei for the following year which shows the Group generating a 8urylus for the year. Reforecasts lo the end of June 2023 have also been prepared based on likely and worst ease scenarios. In both of these situations it is expected ¢hat thé Group will continue with net positive current assets and l¢)tal assets, along with sufficient positive cash balances. In the likety case a surplus is to be generated by the Group. These foTecasts have been prepared taking account of recent cost of living rises and increases in global prices for energy Such as gas and raw materials such as papeT. The charity is no longer solely rehant on the delivery of face to face examination8, having successfully developed and rolled out on]ine alternatives of equal rigour and value which have been welcomed by its candidates. It is [￿W much better placed lo withstand any future travel disn￿tiOn8 as It is able to offer online asse88ments worldwide. Now that travel restsidions are easing. the charity is returning to offering face to face exaTninations worldwide together with on]int a8se&%ments. thereby offering moye choice to candidates and appea]ing to a wideT base of leamers. While international travel rernains ]imiied th's is not expected to 8i8nificandy affect our abllity to continue •s a Boing concern due to the avallability of our dI￿'t&7 assessments. Further acti¢?￿ are planned to increase re8iiience and reduce rdiance on internationa] travel by recrniting and traSning facilitators pnd examiners based in the cthjnty where the examinations take plaee. The charity has the res¢)urces to allow it to inve8t in it8 diwi proRTamme to conrinue to meet CU8tomer needs. The introduetion of customer self-ser4iee means that examination fee8 are reL*ived 800neT from international territorie3. reducing the amouni of cash tied up in debtors. thereby irnproving the Group'8 ca8hfiow and reducin8 Its exposure to dOUbth￿ debts. The truytee$ therefore have a reasonable expectation that the charity has Adequate resource8 to continue in operationul existence foT the foreseeable ￿ture. being ai least twelve months from the date of approva] of these financial statements. and are not aware of any other Inaterial uneertaintie8 which may adver8dy affect the organisation. Accordingty, the fin&ncid slAtements continue to be prepared on the goin8 concern ba8iS. Page 12 THE ASSOCIATED BOARD OF THE ROYAL SCHOOIS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STRATEGIC REPORT) {cortnNUED) FOR THE YEAR ENDED 31 JANUARY 2022 FINANCIAL REVIBW (eollllnued) Inva8tm•nt Selectlon Pojiq and Perfornwiee On the incoTporation of the Associated Board in 1985, ti was decided that the pubhslllng business of ABRSM 3hou]d be tratLsferred to a wholty owned wbsidiary, The Associated Board of the Royal Schools of Music (Publishing) Limited. This company granted an Lutseeured loan note to ABRSM as consideration for the transfer of the publishin8 business. ABRSM Teceives interest on this loan note at above the bank b&8e rate. Additional]y, the wb8idiary company pays royalties to ABRSM on copyrigbts owned by ABRSM. Finally. it donate8 its taxable profits to ABRSM under a deed of covenan( which aTwunted to £755.000 {2021: £1,309,0C￿}. This Is a long-terni investsneni held for the benefit of ABRSM and integrated WAthin ABRSM. operations uti]ising the intellectual property contained in ABRSM'S syllabus listins8. which are periodically refrethed, ABRSM occasionally receive8 sums of money to provide for prizes for c4ndidate5 perfornllng well in Its examinations. In order to maintain the real value of these gifts it invests 8 Significant proportion of the hize Endowrnent Funds in Blackrock Chwitie8 UK Bond and Equity Common Inve8tsnent Funds. At 31 January 2022 these had a c05t of E779.OCrt) and a mthet valuation of £1,578,LX)0 12021.. £655.000 and £1,336,000 respectively), reflecting an increase in market values of 8.wo over the prior year,12021'. net decrease of 4.30/0). All other Bu￿luS tiquid fijnds held by ABRSM are placed on deposit to safeguard the fund8 involved and to earn interest until such tin)e as they aTe needed to meet the expenditure involved in ABRSM'S operation8. The interest earned on these dep08its during the year was £8.000 {2021.' £27.000). Prlndpal Rl•k# attd Unc¢rtalntl•• The GovernSn8 Body 18 re8ponwble for the aw88ment and control of the risks faeed by ABRSM. Con8ideration of ri8ks 13 dele8ated to the Audit ar￿ Bi8k Commillee and managed on a day-to-day basis by Senior staff. The Governors believe that awarene￿ of the key risks 18 the sing]e most important element in ensuring that thry are eontrolled. Ri8k8 are identified. assessed and controls malntalned throughout the yehr. with a fomia] revlew of ABRSM'$ risk management processes Undert￿ert on an annual ba8i8. A thor￿)8￿ re￿eW refleedng our changing operations 18 currently underway. In addition to the risk management and miti8atico acdon8 Identified in the table below, ABRSM u8ed the following contro18 to manage risk. forniai agendas and ￿￿nuteS for all GoYenun8 Body and committee activity. dear terms ofreference for all committees- Finance & Business Development Committee. Audlt & Ri8k Committee, Remuneration Cornmittee. NoThllnations Con)mittee and the Mwic Education Advi30ry Committee.. rolling programtne of inttrnal audit eomprehensive strategic planThng. forecastin& budgeting. management accountin8 and variance fotmai vnitten policies. incluth8 Staff po]i¢ie8 readily accessible to all statr. hierarchical authorisation and aPpTo￿l levels: and review of c&qhfiow forecasts Pagg 13 THE ASSOCIATED BOARD OF THE ROYAL SCHOOIS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 FINANCIAL REVIBW (conthiued) In addition to the sI￿llfiea￿t bu8ine8s and financial risks vA)ickn together with the mitigating actions are refetyed to in the Financial Review. key iisks affecting the chatity itthe.. Whai are thè key risks faein8 ABRSWI What is ABRSM doh)g to Tttjuce the ]ikeliknd or minimise the itn ct olthe5e Ti5ks oeeurrin Mana8eTnent regujarly seeks and acts on ememal advice to el￿￿re it remains up w da￿ with the po&sible Ca￿e$ and best rnitigatsn8 adions ¢0 addre￿ thi5 risk The mitigating aaions inc]udÈ.' Cyber attack. major incident (r technoloKy failure le&th8 to Ios8 of data and business inteiruption Bustness Continwry aTrJ Di8BsreT Recovery plan5 In place. Cyter Essen￿ Plw AeLYedlwion renewgj annu￿]Y. Mandatory Seeurity Awareness trainin8 for all staff Ixwi Autheni)￿0n for remote aetess Automatk 3rf pany secuTIty patch wonagement AdVAn￿d Ftrewall 8ecuriry Support contraet In plaee with PWC Chllnge¥ lo UK and relevant overseas le￿51￿tiOn resulatory condiuorth leading ro cunai]rnent of aaiviti¢S. reputation81 damage and/or financial penalties. Annual reviews of tax1è8tslatson in major terriiorfes pwfomtd by expert advisors. Prompt acrion taken when concwm raised by local represen￿tiVeS. Compliance speeialisr and &￿eM￿nCe In place to ensure eomph.anee with Ofquaj. CCEA and Quals Wa]es re8uJations. Mandatory GDPR rrAinin8 and polieies are In place s rtviewed for Gtness for ABRSM conshders 5afe8uarding to be of the uttno$t imponance and Main￿nI a zero-toieranee approach to dealing with safeguardin8 issues. It Tnaintains a ¢uliure of vi￿lan￿ ttroughout Ir3 acdvities. MitigatinB actlo indude: The effective superrision and controjs arotmd working in educaiiord serung with children, including rerno¢e proctoring of reeorded assessments which invo]ve supplier staff, examiners ond ABPSM staff reviewin8 candidates and their eniryronment. Trained Desi8Mted Safeguathg Person and depuiles on constant cover reportin8 to CEO and an organi5ation-wide safegu4rdin8 rtv1￿¥ LY)nimittee Safer reowitment in educwion frwnework followed. D checks cyde of renewaj All sthff and Ibjstee training SafeguaTdL'TtB al￿ chlld protection pojieies reviewed by specia]ists Re8u]arintemal audit of Safe￿￿rdM8 pticies And pr8etice Proeethrn for ryrring and escalation Data proteLlion policy and pro￿th￿s Safeguarding buQt into design of assessment and due ence conducted on third su "ers Page 14 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE SThATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 THE ABRSM PENSION AND UPB ASSURANCE SCHBMB ITHE SCHEME) ABRSM operate8 a defined benefft pension scheme which c108ed to fijture acCn￿l on 31 December 2018. The notionaj 8urpIu8 or deficit on the fijnding of the Scheme. calcu]ated annually under thi8 Standard. is shown in the financi8J statemelts a designated fund entitled "Pension Reserve-. This is deducted from Unrestricted Funds In the balance sheet The approximate actiwial valuation canied out at 31 January 2022. a8 requiTed by FRS 102. represents the market va]ue of the assets of the Scheme a8 £57.9 million and the value of the liabiiltie8 at that date a8 E67.0 mlllion12021'. £49.2 million and £75.7 W￿l10n). Dwing the year ABRSM ynade an addition81 payment of £6.Om to the pen8ion 8cheme. Th18 contribution is treated a8 a rol]ing comnutment vthi]e ABRSM continue8 to make pa￿nts each month as required by the Cu￿ent Statement of Contribuuons. The eonsequent net defieit on the Scheme of £9.2 m]Ilion 12021: É26.4 million) is a statement of the transient 8ituatlon at 31 January 2022. Both the GovernorB and the Trnstees of the Scheme recognise that Njch valuations can Tr￿¢ Si￿￿A¢andY in response lo m**et facrors and the actuarial a8sumption8 made. The Governor8 reco￿]18t that the deficit aTi8ing undeT FRS 102 doe8 not knve a swjficant Immedlate cash- flow impact on the eharity. The positive effect of the contribution8 made by the employer on the FRS 102 liability has been accornpanied by a decrease In technical provisions a8 at 31 January 2022. The disdosure of a pension hability, newly calculated year by year under FRS 102. does not mean that the equivalent amount is already committed and no longer available to the Governors to fitrther the ¢haT1￿8 objectives. The last triennial actwiai valuation wa8 prepared a• at 31 December 2018 and showed a deficit of E25.6 mi]lion. The Scheme do$ed to future accnjal from 31 December 2018 and hlld already do8ed to new entrants, with certain limited exception8, on l FebTWy 2014. A new deficit recovery plan was agreed by the Tn￿tee8 in 2019. Under the plan. the Employer a8reed to pay defiot reduction contribution¥ of £3.37m per annum, In￿eaSing in Ime with RPI (with the fir8t increase applicable on l February 2020). for a period of 7 years and 3 months from l January 2019 to 30 Apri] 2026. The Employer also agreed to pay all costs a$80¢iated with running the Scheme and to take over responsibility for Lifr Assurance WTall8ements with effect from l February 2019. RESERVES Our re8erM compri8e unre8trlcted fund8 and endowment OJnd8. The end¢)wed fundg re8uh from donatlon8 and le8acies whieh ean on]y be applied for a puwe specified by the donor and are not avai]able for gener81 PLUP08es. These fimds are u8ed to award prizes to &YaMi￿tion candidateB in accordance the erlterla Specified by the donor. Endowed funds total £1.6m at 31 January 2022 lThot¢6 2u. 5 atld 241. The unrestrirted funds represent the accuM￿ted surpluses 8enerated from general business aetlvlties and arè ffijndg that are avai]able for use at the discretion of the Governor8. They comprise the fixed aBsets fund. designated funds and general funds. Fixed A88ets Fund The dxed assets fLmd compii8e8 the tuads inve8ted io llxed 8$8ets that the Govemor8 conBider essentia] in enabling us to implernent effectively our operatio1￿ strategy. The fLmd represents the net bwk value of tangible and intan8ible fixed assets. The intan&ble assets arise from investment in our digital transformation progr8Jnme. In prior years related costs were treated a8 expenses when incurred the accounting po]iLy has been changed and a prior year adju5tmert has arisen {note 40). We held É6.2m in the fixed assets fund at 31 January 2022 (2021 Restated. £7.8m}. DeBi8nated Fund8 Designated fimds are fimds that the Covernors have e8rrn￿d for specific PUTPO8e8. Since 2014 and prii)r to this year a total of £14.Om of general funds had been designated to be held for specific purposes, in particu]ar the digital transformation Programme. As at 31 January 2022 £11.5rn of these fijnds have been expended. A total of £3.9m remains at 31 January 2022 in ttspect of ongoing dI￿tal transfonnation and international development. atld £0.5m for examiner cos1& Page 15 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING ThE sfRATEGIC REPORT) (COKnNUED) FOR THE YEAR ENDED 31 JANUARY 2022 RBSBRVBS (contInu￿) General Funds In aceordanee with Ch8Tity Commission guidance. the Governors set a target for the level of free reSe￿e8. or general thds. that we should rnain￿ to ensure ow financia] security and funding of our business plan. Free rese￿eS or general funds are defined as total unrestricted fimd8 fixed assets and designated funds. Since many of ABRSM'S costs are directly related to the number of examinations held, it 18 ABRSM'$ aim to have sufficient liquid resources and cash balantes so that. in the event of a downturn in the demand for its serwtces. its operating costs, excluding Costs directly relating to activity le.g. examiner fees and vemie M're}, would be Met for a period of six montFL8. plus any outstsnding liabiiities. Dwing this period. other actions to mitigate loss would be implemented. This implies the need for a level of free reseNes of El l.lm 12021.. £9.6ml. As the ChaTity is wholly re]iant on globa] trading conditions to generate income. the Governors consider that six months represents a rea]i8tic and prudent p￿Ition. General fijnds stand at E4.7rn at 31 January 2022. This is a decrease of £l.Im OT on the prior year restated 12021 Restated.. E5.8ml and is E6.4m below the minimum level of general Te8erve8 set out in the preceding paragroph,. E6m of ￿,5 being the funds transferred frorn the General funds to the Pension funds during the year. The g]obal pandemic iesuiied in a reduclion in face to face exam5 in 2021 and 2022 both in the UK and internatlonalty. Details of the impact are set out above in the paragraphs under the Going Concern heading which outline the highly effecrive measures taken and further actions planned to increase resilience, reduce reliance on internatSonal travel and bulld free reserve8 back to the level Rt I?￿ in the precedin8 Para￿h. Included in designated funds are development funds of £3.9m12021.' £3.8m). These funds have been sel aside to ftmd fijlure long terni projects but if necessary c(yJld be used to fLtnd more immediate needs. The combined genera] and developmern fund8 amount to E8.6m12021 Reststed.. É9.6ml. The gTOUP had a cash ba]ance of £9.9m (2021: £12.3ml to cover 8hort term requirements. The pen8lon liab￿ty represents the pre8ent value of the pension liabi]ittes les8 the fair value of the pension scheme assets. takin8 into account the £6m advance payment. ca]eulated in accordance with FRS102 (note 321 and does not imply a SI￿]fiCant eonstraint over the use of reseThes for the foreseeable future other than lo ensure monthly contributions are met, whieh are budgeted for acCordtn￿. PLANS FOR FUTURE PEIUODS G•n•ral o¥ec¢lw ABRSM will continue to conduct its operations to the highe￿ S￿dardS. including all forn￿ of online assessment. recogni8ing that integnty and impartiality are fundamentsl to ABRSM'S continuing 8ucce8s. AII developments are evaluated for financial viability to ensure Bound cost and budgetary controls and to enable ABRSM to maximise its contnbution to music education. ABRSM will continue to Use its inlluence in promoting music education generally. in accordance with its tharitable mi&8ion and will continue to take steps to protect our environment by operating in ways that reduce our carton footprint. Short terni objertives.. In a context where education. social contact and travel may continue to be disn￿ted. our short terni objectives are to use digital first solutions to strenyhen our core asse&8ment actsw and to develop qUal￿tatiOnS and supporting resources that appea] to a ttK)re diveTse range of leamerJ. During 2021. ABRSM continued to develop online options to allow learner8 to take a88e3sments at times and in ways which Jre convenient for thenL We wlli continue to improve and simplify the custorner iourney. Practical exams are now being offered in the UK and intemats"onaJly. however. we will continue to seek opportunities to reduce our carbon footprint by alternative solutions. Pag8 16 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYIS REPORT (INCORPORATING THE STRATEGIC REPORT) (Co￿nNUED) FOR THE YEAR ENDED 31 JANUARY 2022 PLANS FOR FUTURE PERIODS (¢ontinu•d) Long frn Pl•Trx.' During 2021. ABRSM developed and implemented a new 5-year cotpor*e strategy centred around our ongoing mission to enrich lives by inspiring musical acbievement arou1￿ the wortd. A focus on the needs of our customers is at the core cé our strategy. which is also guided by five key themes.. educational excellence., collaboration,. leadership and advocacy; equality, diversity and inclusion.. and, suStai￿bIlIty. Create resouwe5 and ongoing training opportuniues for music teachers in a variety of contexts. supporting their development. Budd sL￿port for exceJ]ence in m￿91c teachng ithin 8dM￿lS by reco￿181n8 Pu￿qUa￿ty and ImaBinative music.maknng. Collabordtc with partners around the wozld to promote the benefits of mu8ic education for all wherever we operate. Develop new 88se88ment8 and re80urce8 that qwckly t*oaden our appeal to J wideT and moTe diverse range of musicians and accelerate cmjr &b￿ty to offer products that help learner8 develop thetr sklll5 and make progreB8 in muslc. Maintakn and innovate our CY￿ent qwlthcations and as8e88ments. a8 well a8 the publications and dI￿'t)] resource8 th&t support thenL Maintatn and develop new partnerships to •dvocate for the 1mkwr￿e of music education and Strengthen our ambassadorial netwodc to promote music-making everywhe￿. Make donations to sponsor music education pro8ramme8 and scholar8hip8 in the UK and internationally. Set sdence.b88ed tsrgets that reduce our GHG emi88ions in line whh Paris Agreement goa18 to keep global warn)ing to within 1.5QC of pre-industtial temperature level& Adapt how we operate in order to reduce impact on the enviTonment. Traln and en8a8e ￿aff, contractors, partners and customers in our 8U8tsi￿bjknty a8enda. Our objective8 hi8b]ight a renewed focus on Bupportii4 music teachers with prOt￿Onal deve]oprnent. and the Importanee of transfonning our ways of vthin8 to e￿qUre our bu81ne88 is environmentally sustsinable. Working in partnership with other8 in the UK and beyond. we will continue to promote the value of mu8iC educatio￿ celebrating achievements of learner8 and hiw'ghllng the itrwrtance of progression in mu81¢. The Strategy includes targets for our recovery from the effects of the pandemic as well as long term Our aim i8 to increase our ablliry to invest back inio mu8ic education. both in the UK and Internation￿Y. PUBUC BENE The Governorn have considered the guidance on Public Benefi¢ pub]ished by the Charity Commission. The Governors believe that increasing the skills. knO￿edge understanding of music provides benefit since the subjeci itself is of educationa] merit. Additionally, they alw believe that the processes involved in read)Sng the particular level of competence tested in one of ABRSM'S asse&wr*nts deliver educationa] value of themselves. The benefits of in¢rea5ed musica] skill are direcdy related to the Ch￿1t￿S al￿4 no detriment or hann is con8idered likely to aTi8e from activities. The Governors consider the beneficiaries to be a very wide range ofpeople. it)8ofaT as the assessments offered by ABRSM are taken up in over 90 different couniries throughout the worfd with many thousands ofcandidates both in the UK and worldwide. With the launch ofonline assessments and diwl dojvnioads ABRSM'S setwices can continue to reach audiences around the world despite the restriction% on movement resulting from the global pandemic. There is no age limit for those enteiing exams although the va8t majority of the candidates are of school age. CompreherL8ive access arrangements are in pla¢e to meet a wide raD8e of Theeds. Page 17 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STRATEGIC REPORT) {COfrnNUED) FOR THE YEAR ENDED 31 JANUARY 2022 PUBLIC BENEFIT (continued) A number of exam ftts charged internationaljy are based on I(￿ economic conditions. ABRSM'S online services, such as Play On. Aural Trainer Lite and Melody Writer, are available at no charge internationally. ABRSM will continue to support these innovative educationa] tools and develop addits'onai online tools to support m￿siC education. ABRSM also provides public benefft by fimding g¢holarships and bursaries for students at four Royal Schools of ￿￿81c. Additionally. ABRSM PTovides sponsorthip for other musichl orgartiutiong tn the UK And inten)allonalty subject to the avai]ability of fimds. ABRSM'8 Clas8ieai 100 resource for schoo18 and the Jcxrney8 sUb￿lptiOn app were made freety ava]lable to ail through Play On during the lockdowns. ABRSM supports the Royal Academy of Music, the Royal College of Music. the Royal Northern College of Music and the Royal Conservatoire of Scotland. which are charitie5 in their own ri8ht. It does thi8 through the provision of scholarships and. where possible, thmugh distributions in the form of donations. It also supports the Roya] Welsh College of Music and Drama and the Hong Kong Academy of Performing Arts. The public benefit delivered by ABRSM'S support for these and other music education orgaThsations is set out on pages to 10. The Governin8 Body's Report lincorporatin8 the Strategie Report) demonsrrates the way in which ABRSM'8 8trategie8 SUPPOrt its objectives and provide publie benefit. ENVIRONMBNTAL IMPAcr ABRSM 1$ committed to protecting our environment by inerea* coeratin8 in way8 that reduce our cart)on f￿tprint, harnessing technologica] devdopments to reach leameTS around the world. In compliance with the Streamlined Energy and Carbon Reporting {SECRI rwriTements ABRSM i8 reporting on our energy use. ABRSM'S totsl UK energy use and 8reenhou8e gas emissions due to UK energy use 18 8hown beloyr. Year ended 31 January 2022 698.673 156.140 0.37 Year ended 31 January 2021 515,107 111.814 0.51 UK energy use (kwh) A8s0ciated greenhouse gas emissions (kg C02 equivalent) Intensity ratio.. Emi8sion8 (kg C02 equivalentl per exaMi￿On The energy and emissions reported above arise from our offjee at 4 London Wall Place and car fuel. Infom)alion regarding our office is derived from inforn]ation provided by our energy supplier who provided eleetrieity and heating/cwling from a local combined heat and power faciMty. The amount of car ￿tI used is based ¢)n daim8 from 8taff and examiners. Due to the loosenin8 of Covid-19 re5tTirtions in 2021. 8¢aff began to inuease their time spent working at 4 London Wall Place whilst sthl spending a si￿11ficAnt part of their working week working from home. As a result, energy LLqe at 4 London WaJ] Place increased sli8htty year on year. The fft out of 4 London Wau P]ace achieved the Bronze standard SKA rating,. lighting 15 controlled by infrared 8enBors and the heating and coxAing system is timetabled. Staff are engaged through the departmental representation QD a sust￿b￿lty Worting Group. which completed a carbon audit in 2021, and instigated a two ye4T workplan to drive cbange and a culttre of envi￿nments1 awaTene$g and responsibility. The de]ivery of Practical and Theory exams in the UK and around the world contributes most significantly to the group's environmental impact. Examiner international tours for practic￿ exams organised efficient]y to reduce air travel lo the minimum possJTr>le and emissions are monitored. During the Covid-19 pandemic many tOUTS were cancelled and so examiners travelled far less than in previous years. In order to continue to provide services to leamels. Perfornjance Grade online examinatioDS were introduced along with Online Theory exami￿tiO￿. As examiners did not need to travel for these examiDations. ow energy use and associated emi&810￿$ were Si￿ll&cantty reducelt Page 18 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT UNCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 ENVIRONMENTAL IMPAcf (eonthiued) We aspire to Teduce our energy use and a850eiated emission fillther by using more locally trair*d examiners. The introduction of automated bcdin& processing and mathg of eXWni￿n$ in 2021 supplanted previous paper-based processes and significant]y reduced paper con8umptioTL However, in common with other businesses who have moved their opeTatiOW OT>line. we aTe awaTe that the increased use of technology bring8 with it increased ener8y use by our staff. examiners teachers and learners in the operation of their e]ectronic devices. Our publlshed bcKJk$ and rewurce8 are m8de from sustsinable 80urce8. DIVERSITY AND ThICLUSION ABRSM'S commitment to diversity and inclusion has progressed into sigrnfjcant aetion and now fomis a distinct strand in our organisational strategy. A Diversity P)an Wa8]aUr￿ pubiidy in October 2020 and the group reports Te8u]aTly on progre88 via the website. Five key areas of ABRSM'8 operatlon8 and or8anknatlon have been Identified as key to promotin8 8reateT diversity and indusiorL Actfv• ¢ommlulonlnz We are constantly 8eeking to incre88e the diver8iry and breadth of our repertoire by drawing on new sources of quality musle from eomposer8, and wider Styles and infjuences. AB a result of active wort¢ in this area, A significant proportion of new pieces in the new Wood￿ syllabus have been commissioned from black, brown, indi8enou8 and people of colour I'BBIPOC-I composers and we have increa8ed the repreBentstion of female composers. ABRSM is raising awareness of the new more diverse repertoire with existing partners in order to encourage them to integrate new commwioning programn%8 into thelr Work. ABRSM Btaged a successfvl 'Writing for Mwic Education. w0￿h(g ftjr 100 potential composers a8 Part of our commitsnent towards open-8ource guides and opening up compositlon ft)T music educatio]L AS we prO￿e$S our Actlve commi88ioning Programme it 18 our aim that. each year. we comTniwon a minimum of 20 new compositions or arrangements from ￿de[represented eoft4)oBen that may quaiify for inclu8ion on fvture syllabus Ilst& In addition to increa$ing the proportion of ￿lat￿$ piece8 by BBIPOC composers. In the new W￿dW1nd syllabus. the 8yllabu8 adw80ry team now holds regular meetings t￿ernal parthers. to receive advice. share plan8 and offer support in this specialist area. Additionally. the group is Working dosely vath flve BBIPOC composer8 to contribute additiona] composition8 for digital publication OD]y. pnmarily to support the Creation of a th'ver8e portfolio of additional repertore for'fourth piece, seieetlon of the new Perfonnance Grade. Mentorlhlp aAd developmentprozrammefvr eonw In January 2021 we launched a new mentoting and development scheme to support the careers and work of Black and etTrJnically diverse compo8ws and other compose[¥ from undeTrepresented gmups. Our aim is that by 2030 ihere wil] be a minimum of 100 new cornposer8 from Urtde￿eprtBented groups who have been on the ProgTamme. We have succes8fully completed the pflot programme of our comp08er mentoring Scheme with six young composers worklng ajongside eolieagues at ABRSM to learn the craft of wyting for music education. Thi8 scheme will continue in parti* with the Ivor8 Academy as well as Black Llves In Music and the Musicians Union. D•v¢loplrypartner¥hlpJ advoca¢y ABRSM will continue to hamess the power of 8porwr8tllp relation8hlp8 with Current partnern and a range of nwrf, grass roots initiattve8 to 8et Specific diver8iry aml inclusion targets coveiin8 nwnbers of participants, rdnge of voice8 and gwd practice di88evnl￿ti0J Page 19 ThE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STRATEGIC REPORT) (COKThNUED) FOR THE YEAR ENDED 31 JANUARY 2022 DIVERSITY AND INCLUSION (conthiued) Tran8lonnln8 the organts4tlon The Governors are committed to bringing a range of voiees, backgrounds and perspectives to ABRSM'S Staff. representatives. advisers and deasiOn-mak￿g stsijctures. We conducted a diveT5ity 8uryey of ABR5M'8 examiners, supported by Musician8 Union. to better understand diversity and prioritse5, A cro58 or8ani8ationai Diversity & Inclusion Resour¢e Gr(xw harnesses ideas and feedback from staff to help develop strategie8 to drive culture thange. owneTship and collaborntion on systemic change across and beyond the organisation. SEcfioN 172(1) STATEMENT BeCtIo￿ together with th08e page8 incoTporated by reference. acts as the ABRSM'S Section 17211 8tatement. The Governors have a responwNity to aLt lo promote the wJece88 of the Krc￿p with regard to the following Matters lamon8gt other8)'. The likely consequences of any decision In the lon8 terni- Pa8e 4 details how plan8 are prepared and updated. The impact of the companys opeTations on the community and the environment are ¥el out QD Pag¢$ 17 to 19. The de8LrabUity ol the company maintaining a reputats.on for lll.gh 8tandards of business conduct: ABRSM Is re8￿ated by Ofqual. the Charity C¢)mmiswon and OSCR and faces competition in the markets in which it operates and therefore must ensure that it maintain8 the hJ'8hest otandards consi8teni wlth its reputation and history. The need to act fairty as between members of the company. Repre8entatiYe8 of eath of the four member8 Sit a8 Govern¢)T5 on the Governing Body. thus each member h48 the opportunity to be fully engaged in the decisions ofthe Governing Body. The Governors recognise that in addition to ABRSM'8 members. they have a responsibllity to engage wlth other stakeholders. The Governorn consider other main 8takeholder8 to be candidates and their parent&, mU￿e teacher8. examineTS. representatives. Yolunteers and employee& The Governors engage wlth these stakeholders via the senlor leadership In a valiety of ways a8 follows: Candidate$ and their parents - We en8a8e eustorners thTQU￿ emai]s and Social rnedia and rnaintain infonnation on upcoming exam s￿lOnS and new products 8eJvice5 on the website. We Tun regular 3urvey8 to 8eek customeT feedback. Music teachers - In addition to ow communication channels for candtdate$ and thelr parents, ABRSM provides separate TesouTces on its website to support teachers. Specia]ist courses and events are regulady held for teacher& . ExamineT8 - A dedicated team engage exami￿ in policy and other continuous professional developTnent event8, as well as town hall s￿e discussions. Exarniner online conferences are a]so held annua]ly, allowing exarntneTS to engage with their peers and ABRSM. Representatives and vohmteer8 Contact is rnaintained a dedicated ABRSM team and newsletters. tralning events and. web?nar8. Employees - The staff forum meets each week to discuss matters direct]y affecting staff. Thi8 gTVUP meets with the Chief Exeeuttve and HR director on a quarterty basis to Provide feedback. An all staff meeting is held monthly, alongside quarterly departmental disc￿$s1Ons. to allow the senior leadership and others to provide an update on ongoing projects and cuttent i&sues that affect them and ABRSM. Page 20 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STrATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 The Governing Boty8 Report (incorporating the Strategic Report) has been approved by the Govemor8 on 21 June 2022 and signed on their beha]f by. Tony IIAlu CBB Page 21 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC STATEMENf OF THE GOVERNING BODYS RESPONSIBILITIES The Govemors I￿0 are also direetors of The Associated Board of the Royal Schools of Music for the purpose8 of company lawl are Tespon&ble for prepaying the Governing Botys Rew)rt lincoTporatin8 the Strategic Report) and the financial statements in accordance applicable law and regulations. Company law requires the Governors to prepare financi81 statements for each financial year. Under that law the Governors have elected to prepare the finanaal statements In accordJnce with Untted Kingdom Generally Accepied AccoLLnting Practice Iunited Kll]gdom Accountin8 Standards and applicable lawl. includin8 FRS 102 The Financial Reporting Standard app]icable in the UK and Republie of Ireland. Under company law the GovernoTS must not approve the financial statements uniess they are satisfied that they 8ive a true and fair view of the state of Jffair8 of the ¢htiTitable company and the group and of the incoming re80UTces and application of resources. including the income and expenditure. of the charitable group for that period. In preparing these financial statements. the GovemoTS are required to: select sultable accountlng po]icies and then apply them consi#ently. obserwe the method8 and principles in the Charitie8 SORP IFRS 1021.. make judgments and accounting estimate8 that ue Teasonable and prudent: State whether appheable UK Accounting Standards have been followed, subject to any material departures disdosed and expiained m the financial statements: PTepare the financial statements on the going concern basis unle58 it 18 inappropTi&te to pre8ume that the group will eontinue in business. The Governor8 are re8pon8ibJe ftir keeplng adequ*e accounting record8 that are sufficient to 8how and explain the charitable company'B and gr￿.5 transactions and d￿cloSe with rea5onab]e accuracy at any time the financial po8iiion of the charitable company and the 8Toup and enable rhem to enswe that the financ￿1 statements comply with the Companie8 Act 2006, the Charities and Tn￿ee Investment IS¢otlandl Act 2005, the Chariiies Accounts Iscodandl Reguiats"ons 2006 188 amended) and the provisions of the deed. The Governors are also responsible for safeguarding the assets of the charitable company and the group and hence for takng reasonable steps for the prevents.on and detection of fraud and othet itregulariues. The Governor8 confirm that: 80 far a8 each GoYernoT 18 aware. there is no relevam audlt irjfomlltion of which the charitable company, auditor is unaware., and the Governors have raken all the steps that they oughi to have taken as G0ven￿)r9 in order to make themselves aware of any relevant audit Inforn￿tiOn and to estab118h that the chariuble coryany's auditor is aware ofthat infom)ation. The Governors are responslble for the maintenance and inte8rity of the corporate and flnanelal Infomlation included on the charitsble company's website. Legislation in the United Kingdorn governing the preparation and di58tmination of financial stater*nts rnay diffeT from legislation in other juri8dietion8. Page 22 INDEPENDENf AUDrroR'S REPORT TO THE MEMBERS AND GOVERNORS OF THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC REGISTERED CHARrrY riuMBEIL. 292182 CHARrrY REGisfERBD IN SCOTLAND NUMBEIL. SC043343 COMPANY NUMBEL. 01926395 We have audited the financi818tatements of the knsoaated P&)ard ofthe Royai Schools ofmusic I'the charitable CoTnpaD￿l and its subsidiary Ilhe group'} for the yeaT ended 31 January 2022 which comprise the Conso]idated Statement of kncial Activitses. the Group and Chanty Balance Sheets. the Consolidated Statement of Cash Flows and notes to the fin4neial statements. including signifjcant accoutiting policies. The financial reporting framework that has been applied in their preparation is app]icable law and United Kingdom Accounting StandxTds. including FU￿nCIal Repoty Standard 102 The Fttian¢ial Repow Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Aecepted Accoiinting Practice}. In our opinion the finandal statements: give a twe and fair view of the state of the group'8 and the charitable cOmpan￿S affairs 88 at 31 Jamiary 2022 and ofthe group's and the charitable compan￿$ income and expenditure. for the year then ended: have been properly prepaTed in accordance Iwth United Wdom Generally Accepted Attountlng PraL*ice; and have been prepared in aceordanee with the requirements of the Companlts Art 2006 and the Charities and Trustee Investmerrt {Seotland) Act 2005 and Regu]ations 6 and 8 of the Chwities Accounts (Scotlandl Re8ukntiom 2fA16 (amended). Ba•1# for oplnlon We conducted our audSt in accoTdance wlth Internatlonal Standards on Auditing (UK) IISAS (UKII and applicable law. Our re8pon8ibilities under those 8tandards are fijrther des￿ibed in the Authtorfs responsibilitie8 for the audit of the fmandal ststements section of our rep)rt. We are independent of the charitable company and the Bro￿) in accordance with the ethica] requIreMer￿ that are Televant to our audit of the flnaneial 8tstements in the UK. including the FRC'S Ethical Standard. and we have fulfilled our other ethScal respons5bi1Stle8 th 8CeOTdance with these requirements. We be]ieve that the audlt evidence we have obtsined is 8uffleient and appropriate to provide a ba8i8 for our oplnio Conduthm relatlng ta 8oID8 concern In auditing the ftnAnciai 8taiement8, we have concluded that the tn￿tee,8 U8e of the going concern ba818 of accounting In the prepaTation of the financial statements is appropriate. Based on the work we have perfomjed. we have not identified any materi•l uncertainties re]ating to events or conditions that. Individually OT collectively, may cast signj'ficant doubt on the tharitable CoMpan￿S OT the group'8 ability to continue a8 a goin8 concern for a period of at lea* twelve months from ￿en the financial statement8 are authorised foT tssue. Our responsibllities and the responsibilities of the tn￿tee3 with respect to goin8 concem are de8oibed Sn the relevant sections of thls Tewrt. Oth•r Illfonnatlon The tn￿ee8 are Te8pon&Ne for the cther infonijation cortained within the annual rewjrt. The other Snformation comprises the inforrnation induded in the annua] report. other than the finanaai statements and our auditor's report there0￿ Our opinion on the financia] sratements does not cover the other infOrn￿tiOn and. except to the extent otherwise explicitly stated in our reporL we do not express any fornj of assurance conclusion thereo Our responBibiiity i& to read the (rther inforn￿tiOll and. in doing so. eonsider whether the other infonnation is Tnaterial]y inconsistent with the financial statements or our knowledge obtained in the audit or otheThvise appear5 to be materially misstated If we identify suth material inconsistencies OT apparent material rnisstatements. we are required to detern)ine whether this gives th to a material mis%tOtement in the fit)anciBI statements themselve& If. based on the WO￿ we have perfoTmed. we condude that there is a materiaE misstatement of tbis other inftirn￿tm)ffj we are Tequired to report that fact. We have nothing to report in this regard. Page 23 INDEPENDEKf AUDITOR'S REPORT TO THE MEMBERS AND GOVERNORS OF THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC {CONTINUED) REGISTERED CHARITY NUMBEIL. 292182 CHARITY REGISTERED IN SCOTLAND NUMBEK. SC043343 COMPANY NUMBEIL. 01926395 Oplnlon on other mattm PT¢•¢ribed by the Companles Aet 2006 Jn our opinion ba8ed on the work UDdertaken in the eourse of our audit the infonnation given in the tsustees. repoTL which indude8 the directors. reF￿rt and the strategic report prepared for the PUTposes of company law, for the financial year for whlch the flnancial 8ta¢ements are prepared is conslstent with the fmaniial statements: and the strategic report and the directors. report included within the trustees. report have been prepared in accordance with app]ieable Itgal Tequirements. Matteri on whleh we ar• requlr•d to Twrt by excepdon In light of the know]edge and underslanding of the group and charitable conwiy and their environment obtained In the eourse of the audit. we have nol identified material misstatements in the strategic report or the dlreciors. report ineluded within the trustee8' rep)rt. We have nOtI￿n8 to report in respect of the following matters In relaty)n to which the Companies Act 2006 and the C￿￿ltieS Accounts ISc¢xlandl RegulatiOll8 2(K16 require8 U8 10 report to you if. in our opAnion: adequate and proper accountin8 records have not been kept or returns adequate for our audlt have not been received from branches not visited by us,. or the financial statements are not in agreement with the accwitin8 reeords and returns: or certain disclosure8 of trustees, remuneration specified by law are not made,. or we have not recelved a]1 the infomwtion and explanatiow we require for our audit. RI￿￿n11b7IItIQ￿ 0rtrn￿e A5 explained more fuuy in the trustees. responsibdits.es statement set out on page 22. the trustees (who are also the director5 of the charitable company for the purposes of company lawl are re$pons?ble lor the preparation of the financial statements and for being satisfied that they give a true and fair view. and for such internal control the trustees determine is nectssary to enable the preparation of fjnancial ststements that are free from material mis$tatement. whether due to fraud or error. In preparing the financia] statements. the trustees are re4)onsible for assessing the charitable company's ability to continue a3 a going concern. disclosing. as applicable, matters related to going coneern and ￿ing the going concern basis of accounting un1¢55 the trustees either intend to liquidate the Charitable company or to cease operations. or have no rea]istic alternative bui to do so. Page 24 INDEPENDENT AUDrroR'S REPORT TO THE MEMBERS AND GOVERNORS OF THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC (CONnNUED) REGISTERED CHARITY NUMBEIL. 292182 CHARrrY REGISTERBD IN SCOTLAND NufaBE]L. SC043343 COMPANY NUMBEIL. 01926395 AudltoV* reBpoDsfbllltl•s th• aadit of th• fj￿a￿IaI 8tat•nwnts We have been appointed as auditor under section 44IIXc) of the Ckwities ar￿ T￿￿tee Investment (Seotlandl Act 2005 and under the CoryJanie8 Act 2006 and re￿rt in accordance with the Act8 and relevant regu]ationa made or having effect thereunder. Our objectives are to obtain Teasonable a55urance ab)ut whether the fu￿￿la1 Statements as a whole are free from Materi￿ misstatement. Mthethei due to fraud or error. and to issue an auditor'8 reFMJrt that includes our opinion. Rea80nable assurance 18 a high level of assurance. but 18 not a guarnntee that an audit conduthed in accordance with ISAS IUKI wlll always detect a matejial misstatement when it exists. Misstatements can ari from fraud or error and are considered ￿ltell￿1 if. individually OT in the aggregate, they could rea80nably be expected to inlluence the econonwc deci8iCffl8 of u8er8 taken on the ba818 of these financial statements. Detwl8 of the extent to vthich the audit was considered Capable of deteLtin8 )￿eSul&l1t1e8. indudlng fraud and non.comp]ianee with law8 and regulations are set out below. A f(uther degcription of Lxw re8pon8ibilitie8 for the audit of the fin￿￿7 staternents is located on the Financial Reporting Council'8 website at.. www.frc.¢)r&uk/auditomwnsthllities. Thi8 de8eTiption forrns part of our auditor's report. Ext•nt to whleh th• audh eoMld•red ¢ap•bl• of d•t•¢tln8 ITT•gularttl••, Ineludln8 fraud ITregularltie8. including frauiL aTe instancu of non￿oMphance with laws and regu]adons. We identifled and assessed the risks of rnateri￿ misstatement ofthe fiMncial staiements from irregujarities, whether due to fraud or error. and discussed these between our audit team membeT8. We then designed and perfomied audit procedure8 responsive to those risks. includmg obtaining audit evidence sufficient and appropriate to provide basls for ow oplnio We obtained an understanthng of the legal and regulatory framffi￿ within which the charitable company and group operate8. focusing on those laws and Tegulations that have a direct effect on the determlnation of material amounts and disdosures in the financial statements. The laws and regu]ation8 we considered in this contem were the Companies Act 2LJ)6, the Charities Act 2011 and The Chwities and Tru8tee Inve8tment IScot]*ndl Act 2005 together with the Charities SORP IFRS 1021. We assessed the required comp]iance vrith these laws regulations as part of our audit procedures on the related ilnancla] statement itenu. In additiorn we considered PTovl8loA8 of other lawB and regulationB that do not have a direet effect on the finanelal st8tement8 but eompliance with which nllght be fijndamentsl to the charitable comp8nY3 and the 8roup'B abdity to operate or to avoid a material penalty. We a180 considered the opportunities and incentives that May exist wlthSn the eharitaE4e company and the group for fraud. The law8 and regulations we considered An this Conte￿ for the UK operations were General Dato Protection Regu]ation {GDPRI. OFQUAL compliance and Health and safety he￿alati0Th We a]80 con8idered compllance with local lewBlation for the group's overneas operatin8 segments. Auditing standants limit the required audit procedures to identify non-complian￿ with these laws and regulations to enquiry of the TnL8tee8 and other management and b)8pection of regulatory and lega] correspondence. if any. We idenlified the yeatest risk of materia] impact on the anancia] statementB from irregulaTitie8, including fraud. to be within the Dming of recognition of exam fee incorne. the estimation of tax provisions and the override of controls by management. Our audit procedure8 to respond to these risks included enquiiies of management. internal audit. legal counsel and the Au(lit & Risk Comnllttee aE(*ut their own identification and a88e58ment of the risks of irregularitie8, SaTnple testing on the posting of journals. reviewing accounting estimates for biases. reviewing regulatory corre8pondence with the Chanty Commission and readin8 minutes of meetings ofthose chaTged with govemanee. Page 25 INDEPENDE￿r AUDITOR'S REPORT TO THE MEMBERS AND GOVERNORS OF THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF r￿uSiC (CONTINUED) REGJsfERED CHARrrY NUMBBL" 293182 CHARITY RBGISTERED IN SCOTLAND NUMBBK" SC043343 COPdPANY NtlhSBEL. 01926395 Owing to the inherent limitations of an audit. there is an unmidable risk that we may not have detected Some material misstatements in the financia] statements. even though we have propeTiy planned and performed our audit in accordance with auditing standards. For example, the fijrther Ter[￿Ved non.corryliance with laws and Tegu]htions lirre8ularitieB} is from the events and transactions reflected in the f￿￿)C)￿l statements. the less likety the inherently limited procedures required by auditsng Standards would identify it In addition. as with any audit. there remained a higher risk of non-detection of i￿¢gUlarItieS, a8 these may involve collusion. forgery, intentiona] omissions. misrepresentations. or the ovenide of internal contro]s. We are not re%pon8ible for prevendng non-compliance and cannot be expected to deteLX llOn-c￿np1l￿e wlth all laws and regu]ation& UJ• of our Y•port This Teport Is made solely to the charitable c0Th￿an￿5 membeT8. a8 a bjdy. in accordanee with Chapter 3 of Part 16 ofthe CompanSe8 Act 2C(J6, and to the ch￿itable company'8 trustees, as a ￿dy. in accordance with Regulatt'on 10 of the Charities Accounts (Scotlandl Regulations 2006. Our audit work h&s been undertaken $0 that we might state to the charltable company's members those matters we are required to state to them in an auditOT'S report for no other purpose. To the fi￿eSt extent perniitted by law, we do not accept or assume responsibility to anyone other than the dwitable cowy and the charitable company's members as a body and the charitable company'8 tn￿tee8 as a body. for our audit work for this report, or for the opinions we have Naz5ar Hashemi Senior Statutory Auditor For and on beha]f of Crowe U.K. LLP Statutory Auditor London Date.. 24th June 2022 Page 26 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF r￿uSIC CONSOLIDATED STATEMEKf OF FINANCIAL ACTtVlTIES (INCLUDING AN INCOME AND LYPENDrruRE Accouwr) FOR THE YEAR ENDED 31 JANUARY 2022 Total Total Funds Funds Funds 2023 2021 £'oDD Restated £'ooo (nrte 32) INCOMB & BNDOWMEfffs FROM: Chwltabh a¢tivld•• Exarninations Teacher Support Oth•rtrndlD# Aedvltl•#: Publi5hin8 sa]es lttv•*¢m•nts Other 35J64 li 35.564 li 15,349 42 6029 6,829 53 41 7.612 45 41 328 42.453 45 42.498 23J97 Examinations Texher Support Scholarships Music e(lucation 31,158 213 13,4651 12 27.685 212 1,086 201 21,577 234 1,048 244 8.10 8.11 201 Publishing s￿79 5,879 5,857 38.337 13.4861 12 34,863 28,960 325 325 439 38.337 13.161) 12 35,180 2&,399 Net ￿nI￿OIS) on iftvestrn￿1 17 118 118 1971 N•t Ineom•/{•xp•ndltm} 4.116 3.161 151 7.428 16.0991 ifj.000} Other TteO8nlged 8aln*/OM¥e¥>: A¢llJariai gainloossl on pension seheme {Lossl/gain *)rt forward ctsntracl reV￿￿ation 32 8.092 8,IX12 13.3041 {1.8841 17,253 151 15.520 19.5181 RECONCILIATLON OF FUPIDS: Balance broughr forward PrioT period adjusttnent 11.738 5.597 126.419) 1,493 (13.188) 5.597 11,7171 3.644 40 Balanee brought forwaTd {2021: Reststedl Net rnovemen¢ in 17.335 11.8841 126.419) 17.253 1.493 151 (7.591) 15.520 1.927 19,5181 15.451 19.166} 1.644 7.929 17.5911 For Companieg Aet PUTposes. conso]idated gro&8 inc¢)rne for the finanLial year was E42.453.OM12021.. £23.358.0001. co￿0]1dated 8ry)5s expenditure was E35.176.0(KJ12021 Remted: E29.391.OCQI and net profit was £7.277.00012021 Restats&" net I￿ of£6,033.CwJOI. The notes on pages 30 to 63 fomi part ofthese aCCo￿tr Page 27 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC BALANCE SHEETS AS AT 31 JANUARY 2022 202Z £'ooo 2021 Re#ated É'ooo 2022 £'ooo 2021 Restated £'ooo Ncées XED Assrrs Tangible assets IntBng]Trle asset$ Investments 15 16 17 1,791 4.452 1,578 2.155 5.597 1.336 1,791 4,452 2.360 2,155 5.597 2.118 7,821 9,088 8,603 9.870 CURRErir ASSETS Stock8 Debtors Investments Cath at bank and in hand 18 19 20 840 3.720 6,988 9,937 873 4,262 1.631 12.278 5.248 5.550 9,345 7,440 1.631 8.743 21,485 19.044 20,143 17,814 CREDITORS.. amounts falling due within one year CURRENT Assrrs 21 (10,227 17.995) 19,878) 17,5581 11358 11.049 10,465 10,256 TOTAL ASSETS L8SS CURRENT LIABIUTIES 19,079 20.137 19.068 20.126 CRBDrroRS'. amounts fallt'n8 due after more than one year PROVISIONS 22 23 (5621 11,422) (612) (6971 (562) {1,422> 1612} 1697) NEf ASSETS EXCLUDING PBNSION LIABILITIES 17.095 18,828 17,084 18.817 PENSION FUND DBFicrr 32 {9,166) (26,4191 {9,168) (26.419) TOTAL NET ASSETS/IL1ABIL￿lES) 7,929 (7,591} 7.918 (7,6021 THE FUNDS OF THE GROUP/CHARITY: Endowment fvnds Unre8tricted fund5 Pension reserve 24 25 32 1,493 17,335 {26.419) 1.493 17,324 {26.4191 15,45 1 (9.166) 15,440 (9.166) TOTAL FUNDS 26 7.929 17.5911 7,918 (7,602} The net income ofthe tharity for the year was £7.428,LK)0 {2021 Restated: net expenditure of £6.099.0001 Approved by the Governing Body on 21 Jwje 2022. Tony Ilales CBE Chairman of the Govemors Registered Cbarity Number 292182 Charity Re￿stered in Scotland Number SC043343 Company Number 01926395 The notes on pages 30 to 63 form part ofthe8e accow Page 28 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC CONSOLIDATED STATEMEKf OF CASH FLOWS FOR THE YEAR ENDED 31 JANUARY 2022 2022 2021 Restated £'ooo Notes C￿h fi¢)wi from operating aLtiviti 27 4.891 1.359 Interest income Purchases of fixed &8sets Purchase of fixed asset investments Sale/purcha8e of current a88et inve8ttnents (with m&turity greater than 3 months) 66 {3.982) 15,16 {1,738) (124) (4.438) 2,734 Nat eath llA•d In lttv¢•tln8 4¢ttvltl (6.247) {1.182) New fjnance lease obligations Repayment of firjance lea8e obli8atio 224 159) {66) Net caih umd In financln8 aedvld•• (66) 165 N•t (decr¢u•)/lncrw• ID cath and ca•h (1.422) 342 Ca*h •nd •qulval•nt• at l F•bnw 2021 Cath ond ea•h equlvalenti at 31 January 2022 13.909 12,487 13.567 13.909 Analy41• of cuh and cuh •qulvaients: Cash in bank and in hand Deposlts and nodee aeeounts Oess than 3 months) 9.937 12.278 1,631 13.909 28 12.487 The notes on pages 30 to 63 brni part of these aeeounts Page 29 THE ASsOC￿TED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOIJDATED Accourtrs FOR THE YEAR ENDED 31 JANUARY 2022 COMPANY INFORMATION ABRSM is a chaTitable company incorpThted in England and Wales. Its rewtered office is 4 London Wall Place. Londo￿ EC2Y SAU. AccourTfJNG POLICIBS The prindpal accounting policies adopted. judgemen¢8 and key sources of estirnation in the preparation of the flnancial siatements are a8 follows: Baits of prnparallon The flnancial Staiements have been prepared in accordance with the current Statement of Recommended Practice -Accounting and RepoTting by ChaTities" (the Chariues SORP IFRS1021 issued in October 2019, the Financia] Reportt'ng St8ndard in the UK and Repub]ic of Ire]and IFR51021 and the Companies Art 2006. The presentationa] and fvnrtional currency is Sterlin81£1. ABRSM meets the definttion ofa public beneth endty wider FRS102. The Ilnancial 8t4tementB have been prepared under the historical cosi convention. with the exception of investments, which are included at market value. Preparation of the financial Btaternents Tequlres management to make 8i8nihcant Judgements and estimates. The items in the flnanclal Statements where these judgments and e8timate8 have been made are listed beloyr. Slwfieant Jud8•m•nt• or •tht Po]Iq referen Note ref•r•n The fouowlng are wn81dered w be siwficam estimates in the preparntion ofthe financial 5tatementB: Depreciation Amortisation Dilapidations Tax Provision SclK)larships commitsnents Defined Benefit Per￿lOn Stheme 15 16 22 23 29 32 Expianotion of the estimates relatin8 to the above items are explained in the relevant policy. Prlor year adJllrtn￿nt A prior year adjLL8tment has been made during the year relating to the capitalisation of software development costs, the detai15 of which are set out in note 16 arAd the updated pobcy 15 set out in note 21 below. In prior years expenditure relating to the dI￿tal transfornution programrne was expensed as incurred. Given the continued investment in this Programme the accounting poliry has been changed to capitalise such costs and a￿rtIse them over a three-year period as it was considered that this treabnent would better match costs agairLSt revenues (note 40). Page 30 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED AccouKfs {Co￿NuED) FOR THE YEAR ENDED 31 JANUARY 2022 AccourrriNG POLICIES (coirriNUED) b) The strong perfom)ance of the Group duTitig the year ended 31 January 2022 has promded a fim) foundation for the forthcoming yeaT. A budget bas been set for the fc41owing year vthich show5 the Group generattng a surplus for the year. Reforecasts to the end of June 2023 have also been prepared based on likely and WOTSt case scenario$. In both of these situations it is expected that the Group will coDtiDue with net positive current assets and tota] &￿ets. a]ong with sufficient positive ca8h balance5. In the ]ikety case a sUtp1￿ is to be generated by the Group. These forecasts have been prepared taking account of recent C08t of ]iving rises and increases in global price8 for energy Such a8 8as and raw rnateiia]s such as paper. The eharity is no longer solety re]iant on the delivery of face to face exami￿tiOnS, havlng successfully developed and rolled out on]ine alternatives of equal rigow and value which have been welcomed by its candidates. It is now much better placed to withstand any fitture trave] di8ruption8 as it is able to offer online assessments woAdwide. Now that travel re8triLtions are easing, the chaiity is returning to offerin8 face to face examinations worldwide togetheT With on]ine a5sessrnents, thereby offeiin8 more choice io candidates and appea]ing to a wider base of learners. Vlhile international travel remains limited thi8 18 not expected to 8iwficantly affect our abllity to cortinue a8 a going concern due to the avallablllty of our digital as8e8sments. Further actlons are planned to increase re8llience and reduce reliance on International travel by recNiting and trainlng faci]itators and examiners based In the country where the examination8 tske place. The charity ha8 the re8ource8 to allow it to invest in its di8ltal pro8ramrne to contlnue to meet CU8tomeT needs. Th• IntroduLtion of Li￿tomer Be]f.service means that e￿an￿n￿on fee8 are TeceSved sooner frorn International tenitories, reducin8 the amount of cash tied up in debtor& thereby improvthg the Group, ca8hfiow and reducin8 its exposure to doutrrtfui debts. The t￿￿teeS therefore have a reasonable expectst5on that the Charity ha8 adequate rewces to contlnue In operationa] existence for the fore8eeable ￿ture. being at least twelve mnths from the dat* of approvai of these financial Matement8. and are not avrnTr of any other rnaterial uncertaintie8 vthich may adver8ely affect the organisatioL AccordinOy, the financi￿ statements continue to be prepared on the goin8 concern basls. Group Ilnttnelal rtAtemeuts The consolidated accounts Inco￿￿rnt¢ the accounts of the eharitable coryany and its sub8idiury (together. -the 8rrMJp"I made up to 31 January each year. The re8uIt8 of the trading subsidiary company are presented in the consolidated SOFA by disclosing the income and expenditure derived from its tradthg activities canied out separately fr07n those of the charity. A SUMM￿ profft and 10$8 account for the subsidiary 18 shovm in t)ote 6. The subsidiary compan￿8 a&ets and ]l&knlitieB aTe con801idated in the balance sbeet on a ]ine by ]ine ba81& Page 31 ThE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED AccouKfs (CONTINUED) FOR THE YEAR ENDED 31 JAfiuARY 2022 AccouFTfING POLICIES (coITfINUED) d) UK exanth￿tIon fees and expen*es Examination fees and expenses aTi5ing in the UK are credited or charged in the statement of financia] activlties dwing the accounting period in whieh exami￿01￿ take pl4ce. Internatlonal •xamlnado Where examinations tske place online eXamI￿tion fees and expenses incwred in the UK are eredited or charged in the statement of financial aatvities during the accounting period in which such examination8 take place. Commissions due to local Tepresentatives in respect of online examinations are included in thelr representstlve returns 48 de¢alled below. Where examinationB are held locally these results aTe prepared from returns and annual accoLWL(8 Bubmitted by ABRSM'S local representatives. which are not necessarily made up to 31 January each year but the effect of differing accounting dates 18 not considered by the Governors to be 818nificant. In the rare ca8e that the amounts owed cannot be recovered a bad debt provision is made. Teaeher wpport Training COUT8e fees and expenye8 are credited or ch4r8ed in the statement of financial activlties during the accounting period in which such courses take place. Subicrtptlo Subscription revenue ts presented net of any applicable taxes which have been collected and passed on to the relevant governmental authorities. Members art billed in advance of the start of their monthiy rnembership. monthly 8ubscTiPtlon5 are Tecognised In the month received. annual 8ub8cr1pti0￿ are recogni$ed on a straight-line basis over the life of the subscription h) Expendltur• expenditure Is accounted for on an atenJal$ basis and has been da88ihed under headings that 8ggre8ate all costs related to the category. Where costs eannot be direcdy attributed to particu]&r headings they have been allocated to activits.es on a basis eonsistent with the u8e of resources. Ovethead8 ar* apportioned either on headcount. turnover. staff occupancy of aecommodatlon area or usage basi8 48 considered most appropriate. Expenditure indudes input VAT to the extent thot it i3 irrecoverable. Direct charitable expenditure comprise5 serYice5 identifiable a8 wholly or m85nty In wport of ABRSM'8 charitable and operatt.onal work. These costs are regarded a8 an integral part of caTryJng out the direct clwitable objecDYes of ABRSM and include an appropriate proportion ofoverhead c08t8. Governance costs are those incurred in ci>nnethn with the adrnthi8tration of the Ch￿lty and compliance with constitutional and statutory requirements. These costs have been apportioned acrovd expeTJditure on charitable activities based on turnover except where the cost can be attributed to a specific activity. i) Computer softwarn d•velopmwLt Expenditure on computer software development is capitalised and al￿rtIsed over a 3 year perio J) Seholarshlp awayds All scholarships offered by the balance sheei date for the cwrent academic year are provided in full. Awards for fijture years are subject to review and authorisation by ABRSM each year and are disdosed a8 commitments in note 29. The cornmilments are estimated based on continued fvnding of the [￿rent students in receipt of a scholafthip to the end of thew academic studie$ plus new students starting their studies based on cufftnt fi]nding patterns. Page 32 THE ASSOCIATED BOARD OF THE ROYAL SCHOOIS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS {CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 AccouNfiNG POLICIES (Co￿nHvED) Emplow b•nefits Short4erni employee benefits. inc]udiD8 holiday pay and contnbutions to the defined contslbution pension scheme are reCO￿lSea as an expense in the period in which they ￿ incurred. The defined benefft scheme elthed to fiJtUTe accrual on 31 December 2018 and employees transfened to the defined cootnbution pension scheme on l January 2019. ContTibutions to 31 December 2018 in respect of the defined benefit Bcheme are cljarged to 8a]ary e05ts for r¢￿ectIve activitie8 in the staternent of fitwicial activitie The amounts recognised in the 8tatement of flnancial activities including any 8Ctuatlal galn or 106$ are estimated based on the requirements of FRS102. and are fully explained in note 32. i) Tanglble Ilxed amoti Depreciation 18 provided on CQBt al the following annual rnte8 in order to wrlte off each a88et oveT i18 e8timated usefu] ]ife:_ Short leasehold land and buildmg8 over the Temaining ]Ife of the lease to the lea8e break point 33Yo 2.￿- 33% Compther equipmerrt Plan( fixtUTe8 and equipment Expenditure on fiunlture and equipment not exceethng £1,000 in tc￿1 and all expenditure on repaiTS and malntenance 18 written off in the year in which it is incuTrtd Intwlble klxed aliets In aecordanee with FRS 102 software development COS18 have been recognised as intangible assets a8 they ean be identified with a project anticipated to produce future benefits. On initia] recognition, assets are measured at cost and include al] cost8 direcity attn￿Utab]e to branglng them into worktng condition. A prtor year adJu8tmeni been made in respect of software development costs Inote 40). Amo￿atiOn Is provlded on eost at the followin8 annual rate8 in order to wiite off each asset over its estimated ￿tfvI life'.- Software development Inve•tm•nt• The investsnent in the 8uErfil￿ary company is valued at CO8t. Fixed asset inve8tments are induded in the balance sheet at their market value at the end ofthe fin￿CIal petSod. Realised and unrealised gains and losse8 are credited or debited to the statement of financial activitie8 in the year in which they &ise and att ba8ed on bn)u8ht forward values. thdraw of le88 than o ye4r. L¢•sed auets Leases are dass]fied as finance leases whenever the terms of the lease transfer substantiaJ]y all the risk8 and rewards of owneTship of the leased asset to the group. All other lea3e8 are dassified as Oper￿Ing le￿3. Assets held under finance lease8 are reCogn￿d initially at the fair value of the leased asset {or. if lower, the present value of minimum Jease pawlentsl at the inception of the lease. The correspondin81iabi]ity to the lessor is jncluded in the statement of financial positson a$ a finance lease Obligatio￿ 1£8se payment5 are apportioned between finance charges and reduetion of the lease obligation using the effective interest method ao a3 to ac￿"eve a constant rate of irtterest on the remaining balance of the liability. Finance charges are dethicted in measuritig profft or 1088. Assets held under finance leases are induded in ta￿￿e fixed a&8ets and depreciated and assesryed for impainnent losses in the same way as owned a83ets. Page 33 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 AccourfriNG POLICIES (coITfiNUED) Rents]s applicable to operating leasw where sub#antially all of the benefits and iisks of ownership remain with the lessor, are charged to the statement of finanaal activities on a straight ]ine basis over the lease terni. The aggregate benefit of any lease incentives are Teeognised as a reduction to the expense Charged over the lease terni on a straight line basi p) Stoekn PublicatiOll8 Stocks aTe valued at the lower of cost and net realisable value. For printed music, cost is based on the unit C08t of production br each publication. WOAE in progress at printers is valued at the cost of the paper used and is induded in paper stocks. In estirnating net Tealisable value. due allowance is made foT slow-movin& obsojete, defective and unsaleable item8. Oriwnation costs are cFthrged to revenue in the year in which they are incurred. Rttt￿ of exehan8• Assets and liabilities in foreign currenetÈ8 are cY)nverted into st￿￿n8 at the rate of exchange ruling al the balance 8heet date. All income and expenditure is converted at daily exchange rates. All differences on exchange are dealt with through the net movement in fund8 for the year. Basic financial assets and liabilities such as short term debtors. creditOTS and bank b8lances are initia]ly recognised al fair vaiue less any impaim)ent and transaction costs and subsequently measured at their settlement value. Prize Endowment Funds invested in (￿rInC0 and Ch*islwe Common Investment Funds are carried at fair value. D¢t¢rr¢d Intomé Examination and eourse fees received for future sessions after the reporting date aye included in crediiors as deferred incorne. t) Provlylon# •nd eontln8enel•s Provisions are recognised when the Ca￿ltable company a present legal or constructive otligation a a re8u]t of past events where it 1$ probable that an 0￿￿oW of remtrces will be required to ¥ett]e the obligation and the a￿Unt be estimated reliabty. The amount recognised 15 the best e81imate of the con8ideration required to settle the present obligation at the end of the reporting period, takmg into account any risks wid uncertainties surrounding the obligatio Where the eonsiderallon required to settle a present ckn]igation 18 confirnied, the amount payable is tran8ferred to creditorn and any balance released to the Staternent of kncial Activitie8. Contingent ]iabi]ities. atlsthg a8 a result of past event8. are not recognised when li) it IB not probable that there will be an outflow of Te&LMJree8 or that the amount cannot be reliabty measured at the reporring date or liil when the existence will be eonfimied by firtvre events not within the chatiiable company's control. Contingent ]iabflities are disclosed in the financlal statements unle88 the probability of a outhow of rescrtrces is immaterial. Page 34 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Acco[￿rS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 AccourTrING POLICIES {corTfiTIUEDI Unrestricted fimds comprise those monies which may be used tovrnn18 meeting the ch&itable obj'ecttves of the clwity at the discreticjn ofthe Governor8. Designated fijnds are unrestricted fund8 earnwked by the GovernoTS to be used for particular purpose$ in the filture. TraDsfers are made to designated fijnds on the basis of approva] by the Governors of fijture plans. Restricted funds are Erants or monies raised for a Specific purpL)8e or donations subject to donor impo8ed ccodition& The prize endowrnent fund8 repTe8ent either permanent capital OJnd8 where there 18 no power to convert the capital into income and ￿lch must generally be held indefthitely or expendab]e funds where capital may be ￿￿ed for the purposes ofthe fijnd Taxatlon The A&8ociated BoaTd of the Royal Schcds of Music 18 a regi8tered chwity and therefore ig not ]iable to UK income tax or corpwation tax on income derived from its ch&itable aLthitie8 a8 they fall wlthin the various exemptions available to re￿￿ered charilles. ABRSM is re8i51ered for VAT bjt 18 not able to Tecrryer the whole of Its h)put tax owln8 to the partial exemption provision$. ExpenditUTe indudes input VAT ¢0 the ement it IB irrecoverable. A provision for tax payable iti relation to international operations ha8 been induded in note 23 bavlng regard to profes3ionaJ advice. The whcdty owned sub&diary. The A880ciated Board of the Royal Schods of Music IPubli8hn8) UmSted, Is a commercial entity doTth its pre-tax profit to ABRSM under Gift Aid n￿e& Contrlbutlon• to four of the Royal SelM)ol# of mu￿¢ Contributions to four of the Royal Schools of Mu8ic (or their associated tharitable trusts} are treated as distributions. the Royal Sthools being members of the ch￿lty. They are therefore charsed to the statement of fjrwicial activities in the year in vAJich they are paid and 8hown as a movement in fiJnd8. Government grants are accounted for accDrdin8 to the acCn￿l modd. Page 35 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS {COrnED) FOR THE YEAR ENDED 31 JANUARY 2022 BXAMINATION REVENUE 2022 £'ooo 2021 E'OOO Anatysis by geographieal market.. United Kin8dom and Ireland OverJea8 12,063 23,754 7,020 8.287 55,817 (253) 15,307 42 Forei8n exchan8e 00s81188in on overseag revenue 15,349 Total income Le88'. exarninatlon fees reeeAved In advance (note 21) 38,633 (3,069) 17.196 11.8471 35,564 15.349 D•f•rred fm Incom•: The rnovement ￿th re5peet to eXami￿ort fees Teceived in advance in the year 18 a8 follow8.. 2022 £'ooo 2021 E'OOO Fees in advance as at l February 2021 Les6 fees due for examinatsons tsken in the year Fees received with respect to future examination perk￿$ (note 211 1,847 (1.847) 3,228 13,2281 3,069 1,847 3,069 1.847 TBACHER SUPPORT REVENUB 2022 £'ooo 2021 £'ooo AnaLysis by geo8raphical market United Kingdom and Ireland Overse&8 39 Tcrtal income 42 Page 36 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 5. INVESTMENT INCOME Gn>up 2022 rooo 2021 E'OOO 2022 £'oDo 2021 £'ooo Interest rec•ivabLe from: Unresti?cted funds ize endowment tLfftd8 27 39 24 40 39 53 66 09 79 . NFf IEICOME OF TRADING SUBSIDIARY The AE8ociat¢d Board of the Royal Schools of Music OVrn5 tbe entiTe18wed 8harn capitsj of The Assoclated Board of the Royal Schools of Music {Publishingl Limited. a trading company irtcorporated in the United Kingdom with company number 01910047. fjub&dwy undertaknng donates its taxabje profits to ABRSM under Gift Aid n￿es. The aetlvitles of the Subsidiary undertsking 8UPPOrt the examiMti¢)n acdvlties of the parent eonwany by provision of speci￿1$1 graded repertoire and other materials targeted at specific examinatlon levels. A Summw of the resuh8 of the pub]i8hin8 aLtritses for the year {exduding irth.wi chargeN eiiminated on con301idationl is given below. Audited accounts of the suE&sidiary undettaking will be ffled wlth the Re￿strar of Companies. 2022 £'ooo 2021 £'ooo 8,829 (1,456) 7.612 11,5281 Cost olsale8 Grosi proflt 5,373 6.084 Dlstribtrtlon eo8ts Administration and other operath)8 eI￿rge5 InteTe8t receivable (854) {992} 11,317} N•t Incom• 3,173 3.779 The aggregate umount of the 5ub8idiarfs assets. liabfiities and funds as at 31 January 2022. exc]udin8 intercompany balances. were as foll 2022 £'ooo 2021 £'ooo T¢Xal net as8et8 3,396 4.643 Induding intra-group charges and intercompany balances. the subsidiary's re&nths for the year were a8 follows: tumover £6.833,00012021'. E7.618.0001. net income £755,1)00 {2021'. £1.309,0001 and total net a$set8 £21.1)0012021- £21.000). Pag8 37 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTJNUBD) FOR THE YEAR ENDED 31 JANUARY 2022 7. OTHBR INCOME Other income inc]udes a government grant tota￿n8 £17.000 12021: £323.0001 in respect of the CoronaviTUS Job Retention Stheme. ANALYSIS OF EXPENDITURB Cbarftable Co•t• (Note 9) (Note 14) Amorthadon £'ooo £'ooo £'ooo 2022 2021 Restated £'ooo £'ooo Ch•rit•ble •ctivltle•: Examination8 Teacher Support Scholat3hip payments Music education Publishing 11.541 6.707 76 3.029 24 27,685 212 1,086 201 5,679 21.577 234 1,048 244 5,857 112 1,086 201 2.540 838 2.246 55 15.368 7,621 8.766 3,108 34.863 28,980 325 325 439 Total 15,368 7,621 9.091 3.108 35,188 29,399 Unre8tTicled expenditure on Examinations and Teacher Support for the group before the defined benefit pension scheme adjustment was E31.158.000 and £213.000 respectively 12021 Re8tated'. £25.003,000 and £243,000). The equivAi*ni figure$ for the charity were £31,101.000 and £213,00012021 Restated.. £24,948,000 and £243,000). Included within total expenditure IB an adiu8tment to the defined benefft pension scheme of E3.486,000 12021.. £3,443,000) which has been credited to the pension rèseNe (see note 32). E3.485,000 has been located to Examinations expenditure and £1,000 to Teacher Support. The prior year apportionment was a credit of £3,434.000 to Fxaminations and £9,000 to Teacher Support. A180 induded In expendlture are prlzes pald from the endownent hjnds t￿alling E12,00012021.. £8,OCQI. 9. SUPPORT COSTS Support costs induding 8overnance (see notes 8 and 12) are anal￿ed a8 follow8: EXanth￿tIO￿ Teach•r Publi8bin8 Support Total 2022 Total 2021 Restated £'ooo £'ooo £'ooo £'ooo Exam Support IT Sajes and Marketing Finance Facilitie8 291 2.674 518 262 1.682 93 1.187 291 3,146 358 3,102 443 20 1.823 179 573 29 30 443 99 24 168 Z86 1.867 97 1.287 17 HR & other management 100 6.707 76 838 7,621 6,49B Page 38 THE ASSOaATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOUDATED AccouKfs (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 io. SCHOLARSHIPS 2022 £'ooo 2021 £'ooo United Kingdom rtudents Overseas Stsjdents Macidin Bursary 207 879 207 839 1.086 1,048 The total number ofstholar3 supported duTlng the year amounted to 8912021: 911. I I. MUSIC EDUCATION- UnrertrfCt￿ tuDd• 2022 £'ooo 2021 £'ooo SPONSORSHIP Band Directors. A8sociatlon (Singapore) Bangkok Opera Foundation Commonwealth Re80unds Dhow Countri¢8 London Music Fund MA Exhibition8 The Mayor of London'8 Fund for yo￿8 Mu8idans Nationa] Children's Orchestra Nationa] Youth Choir National Youth Jazz Orchestra Nauona] Youth Orchestra Openup Music Royal Philharmonic Society Serious Events Singapore Symphony Orcbestra The UK Associatlon foT Muslt Education- Musie M Others 12 20 20 18 20 30 26 25 20 30 26 25 li 18 io 12 19 12 34 201 244 Pa￿ 39 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED AccouKfs (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 12. GOVERNANCE COSTS- Unr•stricted funds 2022 2021 £'ooo Governing Boty Costs Audit Fees parent compatry Audit Fees Pension Scheme Fees payable to auditor for non audit 3eTvice8 Company Secretarial Independent Pension Scheme Thairrnan Internal Audit Trustees and OfficeTS iiabllity insurance Penslon Fund Trnstee Indemnity inwT 39 14 57 13 19 26 io 113 179 13. T4Ef INCOME POR THE YEAR 2022 2021 Restated £'ooo 2,000 Net income for the year Is stated after tharw/lcrediiingl: Ftes payable to the companys auditor and it8 as￿lat¢s for the audit of the chatitable companls annual accounts Fees payable to the compan￿8 auditOT and it8 aS￿lateS for txh¢r 8ervices'. Audit ofsubsidiary company Tax eompliance Fees payable to secondary auditors Pension scheme audit completed by other audit fjrn Depredation of owned assets Depreciation of assets held under finance le￿ obll8athons Amortisation of intangible asset8 Operating lea8e rentais- leasehold bui]du)gs - offlce eqiipment 39 57 14 310 75 2,722 13 322 37 1.805 1,121 225 15 1421 115 222 Dllapidations provislon Exchange loss/lgainl on overseas revenue Loss on fair value of deTivative8 253 Page 40 THE ASSOCIATED BOARD OF ThE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLtDATED AcCou￿rS (coKriNUED) FOR THE YEAR ENDED 31 JANUARY 2022 14. sfAFF cosrs 2022 2021 Restated £'ooo £'ooo Staff costs during the year includetl. Wage5 and salaries Social security coBt8 Employer penslon eosts Defined Benefit Pension adiustinent18ee Tr)te 321 Pension finance chaTge Other #aff c08ts 7,197 719 3,949 (J.486) 325 387 7,267 704 3,923 13.4431 439 266 9,091 9.156 The number ofemployees who earned £60.(K)O or more lineluibng benefits) duling the year were as follow8: 2022 2021 £ 60.001 É 70,000 £ 70,001 - £ 80.000 E 80.001 . E 90,000 E 90.001 - EIOO.OCK) £IOO,001- El 10.000 £110.001 . £120,000 £120.001- £130,000 £150,001 . £160.000 £170.001- £180,000 £190,001- £200.000 £290,001- £300,000 During the year £130.36812021'. E2L3,9571 was paid in redundancy and pay in lieu of notice. These payments are Snduded th the tableB above and have been recognised in fvll in the Statement of financial activities. Page 41 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Accouwfs (Co￿￿￿uED) FOR THE YEAR ENDED 31 JANUARY 2022 14. STAFF COSTS (contlnued) The number of employees who earned £60.000 OT rnore during the year to whom retirement benefits are accrning under pension schemes fimded by the company are:_ 2022 No 2021 No. Defined eonttitrAttion stheme 15 16 The company made pension Contn?￿lOnS of £105.50012021.. £111.6881 in rtspect of employees noted above. The defjned benefit scheme closed to future accnJal on 31 December 2018 and active membern eleLted to tran￿er lo the defined contnTrJution pension thrne ftom l Jamwy 2019. The aveTa8e number of employee8. exduding temporary staff. dwin8 the year was as foMow8'. 2022 No. 2021 Charity UK trading subsidiary 164 14 14 178 174 The key management personnel of the charity and its wtx)Ily ovmed subsith.ary received total ernployee beneflts of £1.054.058 12021.. £1,242.457). The key management pemnnel are considered to be the Individuals noted on page 2 together with the directOT8 of the subsidiary who Teceive employment beneflts rectty frorn the 8ubs5dlary. No Governor received pawlent for their seNices iti the year12021.' Enill. Travelling and sub8i5tence expen8e$ reimbLtt3ed by ABRSM to no Governors or A]temates 12021: 31 for expenditure necessarily incurred on ABRSM'S business amounted to £ni] 12021. £621. No other Governor, nor any person nnected with any Governor, received any r¢munerati(m in the year ended 31 Januw 202212021.. £nil}. Pag8 42 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Accouwfs (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 15. TANGIBII FIXBD Assrrs under land and Comput•r £'ooo £'ooo E'ooo Group and Charlty Cost At l Febnwy 2021 Addltions 1324 918 3.936 29 13 16 At 31 January 2022 13 2.324 710 918 3.965 Depr￿tIon At l February 2021 Charge for the year 825 202 465 103 491 1,781 393 At 31 January 2022 1.027 579 2,174 Net book valu At 31 January 2022 13 1.297 142 339 1.791 At 31 January 2021 1,499 229 427 2.155 All assets are used for chwitable purposes. The net book value of assets held under f￿￿let lea8es 18 El12,IX)0 {2021: £187.000) 18. IprrANGIBLB FIXED AssFrs eonthLThdon dmlopmetst £'ooo Total Group and ChaTIty Co At l Febnwy 2021 Additions Disposa]s Transftr8 20 175 7.579 1.534 (2811 20 7,599 1.709 12811 1201 At 31 January 2022 175 8,852 9.027 Amort18atlon At l Febw 2021 Charge for the year On disp058ls 2.002 2.722 (149) 2.002 2.722 (149) At 31 January 2022 4.575 4.575 Net book values At 31 January 2022 175 4.277 4,452 At 31 January 2021 20 5,577 5.597 All assets are used for charitthe purpose& Page 43 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOUDATBD Accouwfs (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 2022 2021 Total £'ooo funds £'ooo £'ooo £'ooo Group Prize endowment funds-listed invesunents ot market value At l February 2021 Additions Unreali8ed gain/Oossl in the year 1.336 124 118 1,336 1,433 118 {97) At 31 January 2022 1.578 1,578 1,336 Prize endowment hmds. li#ed investrnents at mthet value las above) Investment in 5ub8idiary Orditw shares of El eath at co# Unsecured loan note 1.578 1,578 1.336 io 772 io 772 io 772 782 1.578 2,380 2,118 The prize endo￿neTrt ￿ndS are inve8ted in Biackrock Charitfies UK Bond and Equity Comnx)n Investment Fwids cost of £779,000 {2021.. E655.000). The charity's subsjdiary undertakn.ng is The A880ciated Board of the Royal Schools of Music IPubli8hingl Limited. The charity owns lo￿19 of the company's issued ortknary £1 shares. The priThcipa] activity of the company is the production and sale of music publications and recordin88. The eharity ha8 Biven an undertakin8 to its subsidiary not to dernand rePa￿ent of the un8ecured loan note before l Ju]y 2023. Interest is ehargeable on the unsecured loan note at a rate of 2Q/o over the Bank of England base rate from time to time. No provision is considered nece88ary agalr￿1 the £IO.000 c08t of the Investment in thi5 subsidiary. Page 44 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOUDATED ACCOUNTS (CO￿rINUED> FOR THE YEAR ENDED 31 JANUARY 2022 18. STOCKS Gt 2021 £'ooo 2022 £'ooo inted mwic and recorthngs Paper 666 174 721 152 840 873 19. DBBTORS 2022 £'ooo 2021 £'ooo 2022 £'ooo 2021 £'ooo Trade debtors Oversea8 representattves An￿u￿t8 due from 8ub81diary Other debtors Prepawlents and accrued income 761 2,130 445 1,136 2,603 139 925 287 2,130 3.849 231 943 1,136 822 403 3,720 4.262 5,248 7,440 20. CURRENT AssFf INVBSTMENrs Charlty 2021 £'ooo 2022 2021 £'ooo 2022 £'ooo Cash held on depo greater than 3 month8 less than 3 months 4.438 2.550 3,000 2,550 1.631 1.631 Included within the above figure thre treasury deposits with an OTiwI matuiity of 12 month8 or le88. At the balance sheet date the average maturity of these deposits was 5 months for the group 12021: nll month51 and 4 monttr&8 for the chaTity12021'. nil months). The avera8e interest rote wa8 0.36D/o (2021.. nilQ/ol for the group and 0.2￿fi {2021'. nllO/ol for the charity. Page 45 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Accou￿rS (CONTINUED) FOR THE YEAR ENDED 31 JAfiuARY 2022 21. CREDITORS: amounts fal]ing due withiti one year 2022 £'ooo 2021 £'ooo 2022 £'ooo 2021 £'ooo TrAde creditors Overseas representatives Reftjnds due to CU8tome Deferred Income.. exam fees (note 31 Other taxe8 and social 8eLvr¢ty costs Finance lease arrangements Other creditors AccrLds and other deferred income 1,350 2.057 516 3,069 231 1.140 1,185 482 1.847 243 1.197 2,057 516 3,069 1,003 1.185 482 1.846 228 507 2,431 377 2,655 102 2,646 X,419 10,227 7,995 9,678 7.558 22. CREDrroRS: amounts falling due after nb)re than one year Charlty 2022 2021 £'ooo 2022 £'ODO 2021 FinMn¢e leasé arran8ements Other creditors 33 52 99 513 33 529 513 562 612 562 612 The tlnance lea8e 18 secured a8ain8t the coryuter equipment to ￿1¢h li relates. No interest is payable. FRS102 requires the amount of a dilapidation provision to be recogni5ed when the obligation arises. Other creditors represent the estimated infiation indexed (blapidations fund potentially payable on exit from the lease ofour eurrent premises, SalieT8' H￿. 23. PROVISIONS At l February 2021 Movement in tax provi8iojL8 697 725 697 725 At 31 January 2022 1.422 1.422 ABRSM continued to seek advice on its taxation position in relation to its international operatsons and expects that most Tesulting liabilitses will be settled over the course of the next five years with the titnescale being partly dependent on the speed of response of the relevanl tsx authorities. Page 46 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOUDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 24. BNDOWMErTr FUNDS Movemoot In Funds At I Incon￿ and Bxpendlture At31 F•bruary zalns and los•es January 2021 2022 £'ooo £'ooo £'ooo Group and clwlty Ptrnwi•nt prlze endowm•nt 137 107 121 123 449 16 {2) Ralph Bassett Prize aCCoL￿t Constance Haddon Prize account Winifred Liversidge Prtze account Irene La8sen Bequest Welnman/Duraisamy Prlze Sundry named prize8 and general prlze8 account 14 14 49 {21 133 136 497 {ii 282 31 {3) 310 1.224 135 (9) 1,350 xpendable prfze endownwnt fund¥ Jardine Mathe8on Mu8ic schdarsTrMps Gordon Bryan Fund Alan Pickard Piize Taylor Whl'te Gibb8 Prize io 108 27 159 147 15 (3) 269 28 (3) 294 Total •ndovrnMnt funth 1.493 163 1121 1,644 Interest reeeivable Expenditure on PTize8 Unrealised on inve¥tmer 45 1121 118 163 1121 Income Expendltu and IoiM• 2021 £'ooo 2021 £'ooo Interest Teceivable and sundry income Expenditure on prize8 Unrea]ised10s8 on investments 39 18) 197) 39 1105) The endowrnent funds were established to provide piizes for m￿81c31 achieveme1￿ in ABRSM'8 exami￿tiOns. FOT petmanent prize endowment ￿ds. unexpended income is accumulated as capital and Ldded to the fimd each year. Expendable prize endowment funds compTise unexpended balances of donation8 held on trust to be appbed for spec]fic pwposes. Page 47 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE COYISOLIDATED ACCOUNTS {COKllNUED) FOR THE YEAR ENDED 31 JANUARY 2022 25. UNREsriucrED FUNDS J4nu•ry 2022 2trAI £'ooo £'ooo £'ooo £'ooo £'ooo 7.752 11,509) 6,243 D••lsA*t•d ALttd• DÉvekpment hr 3.818 11.272) 1.400 530 3,946 530 5.765 42.453 (37,06SI 16,421) 4,732 Tothi 17,335 42,453 (38.3371 1fj,L￿) 15,451 7.752 (1,5091 6,243 Deil#llat*d hmda DevelOpr￿n¢ fi￿d5 3,818 11,2721 1,4 530 3.948 530 5.754 36.717 {31.3291 (6,4211 4,721 Tota] 17,324 36,717 132.6011 {6.CKIOI 15.440 Designated funds represent development fund8 set aside for the development of ABRSM'S digital infrastructure and development of overseas markets, and fund8 relating to examiner costs. Page 48 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Accou￿rS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 26. ANALYSIS OF IIEr Assrfs BFfwEBN FUNDS Fund balances as at 31 January 2022 are represented ty. Total 2022 Funds (indudln8 £'ooo £'ooo £'ooo Tangible fixed &8sets Intangible fixed asset8 Investments Current assets CuThnt liabilities Non-CUTrent liabi]itieB Provi$io 1,791 4.452 1.791 4,452 1,578 21,485 (10.227) (562) (1,422) 1.578 86 (201 21,399 110.2071 15621 {1.4221 Net a88ets betore pen8lon deflcft Pentsl¢)n deficit 15.451 {9.1661 1.644 17,095 (9.168) Total net a98ets after pension deflcit & pn)vi810ns 6.285 1.644 7,929 Tangible fixed as*8 Int￿gIble fixed a88ets Investments Current assets Current liabilitie8 Non-cutrent liabllltie8 Provisions 1.791 4,452 782 20.057 (9,658) 1562) (1.422) 1,791 4,452 2,360 20,143 (9,678) (562) (1,422) 1.578 86 (20) Net assets b¢ft)re pension defiat & provision8 Pension deflcit 15.440 1,644 17,084 19.166) (9,160) Total net assets after pension deficit & provisions 274 1,644 7.918 Group and Charlty Unrealised gain8 included above on invesbnent a88et818ee Th)te below) 799 Unreall8ed gain8 a8 at l February 2021 Net gain/Oossl arlsing from revaluations in the year 681 118 118 Unrealised gain8 as at 31 January 2022 799 799 Page 49 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED AccouKrs (co￿rINUED} FOR THE YEAR ENDED 31 JANUARY 2022 27. RECONCILIATION OF Nrf INCOME TO NEf CASH FLOW FROM OPERATING ACnVITIES 2022 2021 Restated £'ooo Net income/{deficir} for the repoiting peiic*l. Depreciation charge Amortisation eh8r8e Lo&8 on disposal of fixed assets Interest recelved IGainl1los8 on investsnents Decrease/lincrea3el in stocks Decrease in debtor8 Increase/ldeerease} in creditors Increase/ldecrease} in provisions Net cash movement in pension deficit 16,0991 359 1,805 393 2,722 132 {53) (I IB) 33 542 2,248 725 (9.161) 1661 97 1241 8.774 14261 1571 13,0041 N•t ¢￿h Inoow provlded by opernthw actlvltl 4.891 1,359 28. ANALYSIS OF CHANGES IN Nrf DEBT At l Fobruary 2021 Cath tlov• At 31 January 2022 £'ooo £'ooo Cash and ca•h equlv8lents Cash Ca8h equivalents 12,278 1,631 (2.3411 919 9,9J7 2,550 13.909 {1.422) 12.487 Finance lease 1165) (99) 1165) 66 199) TOTAL 13,744 {1.356) 12,388 29. FINANCIAL COMMTfMErrrs Scholarnhlps Scholarthps awarded for whith no provision has been made in these accounts aTe expected to become payable 08 follow8:. 2022 £'ooo 2021 £'ooo Year ending 31 January 2022 YeE4r ending 31 January 2023 Year ending 31 January 2024 Year ending 31 January 2025 Year ending 31 January 2026 1,072 725 352 177 1,224 796 357 IBO 2.557 2,326 All scholarships offered by the balance sheet date for the current academic year are provided in fv]l. Awards for fvture years are subject to review and authorisation by ABRSM each Ye￿ and are therefore not induded in provisions as at the balance sheet date. Page 50 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 29. FINANCIAL COPaMrrMEPTfs (continued) At 31 January 2022 the group and chwity had fvture total minimum opernting le48e payments as follomry: Other 2022 2021 £'ooo 2022 £'ooo 2021 £'ooo One year Two to five years Over five years 1,207 4.827 1.756 1.207 4,827 2.962 150 219 150 8.996 150 369 The tot￿ firtwe minirn thmnce lease payments a8 the end of the rep)thg peiiod are as follows: 2022 2021 2022 £'ooo 2021 'ooo Not later than one year Later than one year and not lthr thnn flve yearn 66 33 66 99 33 165 99 165 30. TRANSACTIONS WITh REIATED PARTIBS ABRSM wa8 party to a number of financi￿ tran8action8 Mryth its tradu4 8ub8idiary, ABRSM Pub]i5hing duTing the year a8 followy". 2022 É'ooo 2021 £'ooo Charged by ABRSM to ABRSM Publl#hkn Administrative expenses recharged Pension costs recharyed Loan inteTest Management ch•rge Copyright eharge 21 488 17 2,081 324 13 483 17 2,082 37B Charged by ABRSM Pubbshln¥ to ABRSM: Paper stock recharged PTinted music al￿ recording8 Glft ald donadon frollL ABRSM Publl•hlDZ to ABRSM: 755 1,309 Balance at the year end: Due to ABRSM from ABRSM Publishing Due from ABRSM to ABRSM Publishing 2.603 3.853 Duting the year Profr&gion CoIin Lawson was due £10 12021: £nlll in royalties by ABRSM IPublisl]ing) Limited on wnnai C¢)MM￿ tern￿. The balance Outst￿dIng at the year end was £1012021: £nill. Pag8 51 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED AccouKfs (COKnNUED) FOR THE YEAR Ef4DED 31 JANUARY 2022 30. TRANSAcfioNS ￿TH RBIATED PARTIES (continued) ABRSM provided exaMI￿tion services to related parties on norn￿7 commercial tenn8 as foliows.. 2022 2021 £'ooo Ch￿ed by ABRSM Royal College of Music Royal Academy of Music Royal Northern College of Musie Royal Con8ervatoire of Scotland IJ Balanee at th• yw •Dd: Royal College of Music Royal Acaderny of Music Roya] Northern College of Music Royal Con8eNatoire ofscot]and There have been no crther related party tra1￿CtIonS dwin8 the year. 31. FINANCIAL INSTRUMENTS ABRSM has the following financial 4s8ets whith are included at falr value through the statement of financial activiues.. 2022 E'ooo 2021 000 Financiai a$sets at fair value through the rtatement of financial athitie8'. InveBtments 1,578 1,336 Page 52 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Accouwfs (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 32. PBfisioN SCHEMES The chaTity operates two pension schernes" a 8rowJ stakeholder pension plan and a defined benefft stheme. From l Febnwy 2014, qua]itring sr8ff joining ABRSM are auto eDmiled into the group stakeholder pension plan provided by Scottish Equitable plc under the brand name Aegon (Financial Services Register number 165548). Contributions aTe reCO￿llsed in the Statement of Financial Activities in the year in Nvhich they are earned. The minirn employee contnbution i8 3/d of basi¢ salary. ABRSM contiibutes 50/0 of basic sa]ary. Each percentage increase in the employee contnijution 1$ matched by ABBSM up to a mwmum employer contiibution of IIYA The defined benefit 5cherne wa5 e5tatlished to provide retirement benefits for the charl￿8 employees based upon final pensionable sa]aries for those joining before 6 Apiil 2006 or career average salarie5 for th08e joining from 6 April 2006. On l Apri] 2013 a]1 membeTS of the final sa]ary section of the scheme traTL8ferred to the career average section of the 8cheme. The assets of the scheme are held Separately from those of the charity. The Scheme closed on 31 December 2018 to fiJtUTe accrual. Active member8 had the opuon to Join the organi8ation'5 8TOUP Stakeholder pension Scheme at l January 2019. Contributlons payab]e are detern)ined on the basis of triennial valuation8 carried by a qualified actuary. The charl￿9 contributions are tharged as resowces and expended in the year in which contributlon8 are made. The dwity cea8ed conthbffjons foT the accnjal of fijture benefits from l January 2019. The pension servlce Costs foT the year were En￿12021. £nS1}. The P￿Sent value of the 8cheme liabilities includes £744,00012021.. £733.000). carTied forward from the Prior years as an estimate of the past service cost of GMP equalisatio These account8 reflect the requirement8 cl FRSIO2. The economic a88W))ptk)n8 listed below have been calculated by a qualified independent actuary. They are based on market conditions a8 at 31 January 2022 but have been d•ived u8in8 the methodology set out in FRS102. Page 53 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLtDATED ACCOUPTfs (COWnNUED) FOR THE YEAR ENDED 31 JANUARY 2022 32. PBNSION SCHEMES leonlitiu•d) The discount rate has been derived using a corporate bond yield curve approach as required by FRS102. The iBoxx over 15 year COTporate AA rated bond index had a yield of 2.27/0 per annum as at 31 JanLWy 2022. Thi$ index has a duration of around 20.1 years, which is Similar to the duration of the Scheme'$ liabilrties. As the duration of the scheme liabi]ities and the index is 8imi]4r it is not considered necessary to make any further adjustrnent to the index. Retail price infjAtion {RPII has been derived from the spot infjation rates pub]ished by the Bank of England. At duration of 21.5 years. the spot rdte for infiation is 3.81D/o per annwn a8 at 31 January 2022. An RPI increa8e a8sumption of 3.80/0 has been used. ID the prior year it was assumed that Consumer price infiation wou]d be 0.70/0 a year lower than RPI. However. it is expected that the RPI will be calculated in the same way as CPI-H from 2030. so the difference between the two indices is expected to reduce io approximately 0.50/0 a year. Nonetheless. unffl 2030 the rwo indices wi]1 be ca]culated differently and it should be noted that a siwficant proportion of the defettTed pensioner liab￿ltieS wi]1 retire based on the current RPI definitiou lon whi¢h we have a market detemiined infiationary value). It is proposed that the assumption of the difference between RPI and CPI remains at O.V/¢ (with the expectation that this difference is gradually reduced lo 0.5% by around 20301. Thi5 re3uits in a CPI increase assumption of 3.10/0. No estirnated salary incTea5es due to the schen* cloSL￿e at 31 December 2018. Increases to pension8 in Pa￿￿ent which are related to price infiation have been taken to Increase in line wtth the RPI assumption or the annual increase Cap, whichever 18 lower. Increases to deferred pensions which are related to price infiation have been taken to increaBe in line with the CPI assumption, or the cap. whichever is the lower. Commutation of pension by members e8timated at 250A. allowing for an increase in commutation Tates Since the actuatial valuation. Th¢ prtndpal actuarlal u••d p•r annum arn: 2022 2021 Discount Pate 2.3% i.s% Retail PTice inflation 3.8% 3.3% Consumer price Inflation 3.1% Increases to pensionable earnin85 nla n/a Increases to pensions in payment Earned up to 31 De¢ember 2001 EArned from l January 2CKJ2 to 5 2005 Earned from 6 April 2005 5.¢Yh 2.5% 2.5, Prtrretirement increases for deferred pensions Earned before fj June 2009 Earned from 6 June 2009 3.1% 2.6Q/o 2.5% Page 54 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 32. PENSION SCHEMES {continu•d) 2022 £'ooo {67.033) 57,867 2021 £'ooo 175.6611 49.242 Present va]ue of liabilities FALr value of plan assets Defj¢it 9,168 126,419 A••et¥ 2022 W•lzht 2021 £'OLX) Weight Equitie# Bond8 Ca8h linclud5ng divldends recetvablel 35,462 61.3 36.2 29,211 18.776 1.255 59.3 38.1 1,457 Totsi market va]ue of assets 57,867 100.0 49,242 IcKJ.o 2022 2021 £'ooo A¢llvld¢s as follows: Interest expense Interest in¢om¢ 1,127 1802) 1,237 17981 Penslon Finthnce d￿rge 325 439 Employer's da1cit contribution8 (9.486) (3,4431 Defined Benent Pensi{￿ Adjustment (9.486) 13,4431 Chang•s In th• pr•Mnt value of the Defill•d B•n•fft Obbytion IDBO) durlng th• y•ar ar• 28 follo￿. Year enth'n8 31 January. 2022 2021 £'ooo Present value of the ]iabiiitse8 a8 at the start ofyear Cwrent service co Contributions by the memi Interest expense Past 8ervice cost Re.measurement- effect ofeylence &dJusbnents loss/(8wnl Re.me&surement- eifect of change8 in assumption8 loss/(gthl Benefits paid 75.661 69.209 1.127 1,237 (739) (7,947) (1.06& 1421 6.181 19241 Present value of the ]iabi]itie8 as at the end of year 67.033 75.661 Page 55 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (cO￿riNuED) FOR THE YEAR ENDED 31 JANUARY 2022 32. PENSION SCHEMBS (contlnued) Year endin8 31 January: 2022 2021 £'ooo Fair vaLue of plan assets a8 at Start of ye4T Interest Income R&measurement- return on plan assets excluding inteTe8t income ETnployer's nornial contributions Employer's deficit ￿ntrIbUtiOnS Contributions by the members Benefits poid 49,242 43,090 796 2.835 (594 3,443 11.069) 19241 Falr value Of￿an assets as at end of year 57.887 49,242 Actual return on plan asset$ s￿10¢88) 208 3,633 Based on current pensionable earnings and the deficii recovery plan agreed in 2019. the employer'5 defiat recovery contributions expeeted to be paid io the Scheme for (he year ending 31 January 2022 amounts to £3,658.00012021= É3.489.0001. Amount• for th• current and pyevlous four pèrlodi ar• u follo￿. A8 al 31 January: 2022 £'ooo 2021 £'ooo 2020 £'(x)o 2019 £'(M)O 2018 £'ooo Present value ofthe liabllitie8 Fair value of plan assets (67,033) 57.887 175.661} 49.242 169,2091 43,090 158.3481 35.886 157,1771 35,986 Deficit (9,166) 126.419} 126.1191 122,4621 121,1911 Re-measurement- Effe¢t of experience adjuslment on scheme IIAbilities 8ain/Oos81 739 42 {1,1921 (IBI 11471 Re-measurement- Effect of thange in &￿UmptiOn on s¢hen]e liabilities gain/O03sI 7,947 16.1811 {9,073} 330 18791 Revmeasuremenl- Return on plan assets excluding interest income Oossll8ain (594) 2.835 3,821 {1,5481 1,344 FRS102 adiustinent 8.092 13.3041 16.4441 11.2361 318 Volatlllty of FRS102 The results disclosed above are inherently volatile. This is because the ]iabiiities have been calculated by discounting the benefits using the yield on a suilable AA-rated corporate bond. whereas the scheme does not invest solely in high quality Corporate bonds. To that extent there is, for FRS102 purposes, a 'mismatch' between the assets and liabilities, which means that the assets and liabilities land hence the surplus or deficit) wi be vo]3tile between different accouriting period& dependfftg on 8enerai movements in the market. Page 56 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 33. CHARITY STATEMEKf OF FINANCIAL Acriwry (note 32) 2012 £'ooo 2021 É'ooo Chtrltable aetlvltks: Examinations Teacher Support 35.564 li 35,504 li 15.349 42 Covenant from sut6idiary Copyright fee8 755 322 24 41 755 322 1,309 378 79 328 45 Oth•r 41 36.717 45 3e,762 17.485 BXPENDITURE ON: ExaminatiorLS Téacher Supp)rt Scholarships Musi¢ education 31.101 213 1.086 201 13.4851 12 27,028 212 21.522 234 1,048 244 io 201 32,601 13.4861 12 29.127 23.048 325 315 439 31601 13.1611 12 39,452 23.487 Net 8aln/Oossl on Invegtmeni 17 1971 N•t In￿mIl{•xp•ll1•) 4.116 3.161 151 7,438 16,0991 16,IXQI 6.fy)0 Oth•r r•eognts•d 8aIDsIO￿￿). A¢tiwial loss on pen&on scheme {Lossl/gain on forward contract revaluati 32 8.092 8.092 13,3041 11OB41 17353 151 15,520 19.5181 RECONCILIATION OF PUND&. Balance brought forward Prior peTiod adjustment Total comprehensive income 11.727 5.597 11.8841 {26.4191 1.493 (13,199) 5,597 15.$20 11,7281 3.644 19.5181 17.253 151 BalMe• em*•d fonv*Yd 15.440 19,1661 1.644 7,918 17,8021 Page 57 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Accouwrs (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 34. COMPARATIVB GROUP sfATEMENT OF FINANCIAL Acrivrry POR YEAR BNDBD 31 JANUARY 2021 Ullrdtrlded PetssloD Re¥tri¢ted & Total R¢•¢rw¢ Endoivmetst Funds 2021 'IMIO Re#tbted £'ooo £'ooo INCOME & ENDOWMEFM FROM: Charttabl• Ktlvld Examinations Teacher Support 15.349 42 15,349 42 Publishing sales lttv•8tm•nts 7,612 27 328 7,812 39 328 23.358 39 23,397 BXPENDITVRE ON: Charttabl• Aetlvltl Examinations Teacher Support Scholarnhlps Musl¢ educaoon Other tr*dlDg actlvltlos: Publishing 25,003 243 {3,4341 191 21,577 234 1,048 344 5.857 5,857 32.395 13.4431 28,960 P•nilon finBn¢* eh*ry• 439 439 Total w•ttdltur• 32,395 I3,￿4) 29,399 Net Bain/Uossl on investrneftt 1971 (971 N•t lttcom•ll•xp•ndltuY•) 19.0371 1661 Oth•r r•coRnts*d RalM/{lo•M•): AcDJarial lo&8 on pen&on scheme Gainluossl on forw8Td contrart rev4h￿tIOn 13.3041 13,304 11151 19.1521 13cKII 1661 {9,518) RECONCILIATION OF FUNDS: Ba]an¢e brought forwar(I Prior period adiustinent Total comprehensive income 22.843 3.644 19,152} 12&1191 1.559 (1,717) 3.644 19,518) 13001 1661 17,335 126.4191 J,493 17,591) Page Sg THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Accouwfs (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 35. COMPARATIVE GROUP ANALYSIS OF EXPENDrruRE FOR YEAR BNDED 31 JANUARY 2021 Support Staff Cots D•pTedatlon & Total Cost• Restated ￿n￿rti￿tIOn 2021 R¢stated R•ststed Re*tat￿ Restat•d £'ooo £'ooo £'ooo £'ooo Charltable a¢tlvlti¢¥: Bxamination5 Teacher Support Scholarship payments Music education Publi8hin8 7.643 5.466 100 6.354 117 2.114 17 21,577 234 1.048 244 5,857 1.048 244 2,646 932 2,246 33 6,498 ,717 2.164 28.960 Pewlon thianc• chary• 439 439 Total 11.581 6.498 9.156 2.164 29,39 36. COMPARATIVE GROUP ANALYSIS OF SUPPORT cosrs FOR YEAR ENDBD 31 JANUARY 2021 Totol 2021 Ro8tat•d E'OOO Support R•rtatod £'ooo i'ooo £'ooo Exam Support IT induding software development Sales and Marketing Finance Faci]itie5 Governance HR & other rnanagement 358 2,462 341 18 1.635 166 486 358 3,102 443 20 1.823 179 573 33 58 21 167 13 85 5.466 100 932 6.498 Page 59 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 37. COMPARATIVB MOVEMEtir OF ENDOWMEPTf FUNDS FOR YEAR BNDED 31 JANUARY 2021 At31 and loMeB Jthu 2021 £'ooo Febrnary 2020 £'ooo £'ooo Group and ehlrlty Perman•nt prlz• •ndowment fand• Sheila Mossman PTize account Ra]ph Ba$$eit Prize account Con8tsnce Haddon Prize account Winifred Liversidge Prize account Irene La$8en Bequest WeIr￿na￿lDUraIsarny PTize Sundry named prizes and general prSze$ account 144 iioi 17} {9} 18) {31) 137 107 121 123 449 127 128 12 294 (19) 282 1,277 31 184 1,224 Bxp•ndabl• pthe •ndowm¢nt fun Jardine Math*$oft m￿81C scholarship$ Gordon Bryan Fund Alan Pickard Prize Taylor White Gibbs Prize ioi 25 156 161 121 1131 98 24 147 282 1211 289 Total endownwnt klmdj 1.559 39 11051 1,493 Interest receivable Expenditure on prizes Unreali8ed loss on investments 39 {81 97 39 11051 Page 60 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED AccouKfs (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 38. COMPARATIVE MOVEMEITf op UNRESTiucfED FUNDS FOR YEAR ENDED 31 JAfiuARY 2021 At Sl J*thu•ry 2021 2020 E'OOO £'ooo 5.934 J.818 7.752 6.871 (4.053) 3.818 13.682 23.243 128.342) 118181 5,765 26,487 23.243 (32,395) 17.335 5,934 1,818 7,752 6.871 14.0531 3.818 13,671 17.331 (22.430) (2.818} 3,754 T¢ts] 26.476 17.331 (26.483) 17.324 Page 61 THE ASSOaATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2022 39. COMPARATIVE AfiALY515 OF f4ET ASSFfs BETWEEN FUNDS FOR YEAR ENDED 31 JANUARY 2021 Unrestrlcted Funds (including Penslon Rewye) Restated Prlze Endowment Total 2021 Re¥tatsd E'OOO £'ooo Group Tangible fixed aBset8 Intangjble fixed asset8 Inve$tments cy￿ent asset3 CU￿ent liabilities Non-current liabilities Provisions 2,155 5,597 2,155 5,597 1,336 19,044 17.995) (612) (697) 1.336 166 19> 18.878 {7.986) 1612) 16971 Net assets before pension deficit Pen3ion deficit 17,335 126.4191 1,493 18,828 (26,419} Totsl net ￿'abilItieS)1a8Sets after pension deficit & provtslons 19,0841 1.493 (7,591) Chartty Tanyble fixed a88ets Intan8ible fixed asset8 Inve8tment8 Current as8ets CutTent liabilities Non-current liabllities Provisions 2.155 5.597 782 17.648 {7.549} 1612) 1697) 2.155 5,597 2,119 17.814 (7,558) (612) (6971 1.336 19) Net assets before pension deficit & provisions Penslon deflcit 17.324 1.493 18.817 {26.419) (26,419) T¢Xal net Oiabilltlesl/asset8 after pen8ion deficit & provisions 19,095) 1.493 (7,602) Group and Cbartty Unrealised gains included above on investment a38et518ee rnte below) 681 681 Unrea]i8ed gains as at l February 2020 Net gainloossl arfsing from revaluations in the year 778 778 (97} (97 Unreali5ed 8ain8 a8 at 31 January 2021 Page 62 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED Accouwfs {CONTINUED) FOR THE YEAR ENDED 31 JAfiuARY 2022 PRIOR YEAR ADJusfMEwr The Directors have made the decision to capita]ise software development costs associated with our new CRM. The revised accounting policy is to capitabse any software development COS18 an intangible asseL and to anK)rtise the capitsiised eosts over a 3 year petiod Software development costs were previously disclosed as expenditure on charitable actsvities. Set out below 15 the impact of the change in accoiiriw wlicy. in accordance with FRS102, paragraph 10.14. Restated fi￿d bajances.. Grollp 31 January 2021 Group IFeb 31 January 2021 E'ooo l February 2020 £'ooo 2020 Fund balances as prewously 8tsted Software development cost8 capitali8ed Amorti5ation c0518 (13,188} (1.717) (13.1991 11.7281 7,599 3.841 7.599 3.841 12.C(12} {197) {2.0021 {1971 17.591} 1.927 {7,6021 1.916 Restated unrestiicted net ww)vement in funds for the year ended 31 Jonuary 2021: Group 31 January 2021 £'oc 31 January 2021 Original net income Software development ¢ost8 capitalised Amortisation Costs {11.105) 3.757 {11,1051 3.757 11,804) 11,8041 19.152) 19,1521 41. POST BALANCE SHErr EVBITr After the balance sheet date the Directors entered into contracts to continue to develop the CRM 5y$tem. The value ofthe8e contractg was £I.Im. Page 63