THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC REPORTS AND ACCOUNTS FOR THE YEARENDED 31 JANUARY 2024 CHARrrYNUMBER (ENGIAND AND WALES): 292182 CHARITYNUMBER {SCOTLAND): SC043343 COMPANYNUMBEIL. 0192639S THE ASSOCL4TED BOARD OF THE ROYAL SCHOOLS OF MUSIC REFERENCE AND ADMINISTRATIVE INFORMATION PATRON His Majesty King Charles 111 PRESIDENT His Majesty King Charle5 111 GOVERNING BODY Tony Hales. Chair. CBE, Bsc Frances Anderson. M.Soc.Sc {URS), Bsc [Econ}, FRSA Abdul Bhanji OBE, FCA Barone55 Fleet CBE Professor jonathan Freeman-Attwood CBE. Bmus. MPhil. Hon RAM, FKC. FRNCM (Principal. Royal Academy of Music) iLslie Kwan Professor Colin Lawson CBE. MA (Oxon), Mi PhD, D Mus. FRCM. FRNCM. FLCM (Director, Royal College of Music) Professor Linda Merrick GRSM, Mmus, PhD, FRAM. FRCM, FLCM, FRSI Hon VCM. FHEA (Prlncipal, Royal Northern College of Music) Gavin ReÉd ALCM. LLCM. GMUSRNCM, PPRNCM, FRCS. LVO Professor jeffrey Sharkey, MPhil [Cantab) (Principal. Royal Conservatoire of Scotland) Bronwyn Syiel MA [Cantab) Damian Wisniewski Bsc [ETJg), ACGI, BFP. FC& LRAM CHIEF EXECUTIVE Chris Cobb BSC, FRSA DEPiryY CHIEF EXECUTIVE PeDny Mi150m, BA CHIEF OPERATING OFFICER Helen Coleman B& MBA CHIEF DIGITAL OFFICER james Halliwell BSC, Msc CHIEF PRODUCT OFFICER Torn [￿e BA sECR￿ARyT0 THE GOVERNING BODY Rachael Casstles THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC REFERENCE AND ADMINISTRATIVE INFORMATION CHARITY NUMBER (ENGLAND AND WALES): 292182 CHARITY NUMBER (SCOTLANDJ.. SC043343 COMPANY NUMBER: 01926395 TRADING NAME: ABRSM REGISTERED AND PRINCIPAL OFFICE: 4 I￿)ndOn Wall Place, London, EC2Y SAU TELEPHONE: +44[0) 20 7636 5400 EMAIL: abrsM@ab￿M.ac.llk WEBSITE: wwwAbrsnLof8 ADVISERS: ExternalAudltor5: Crowe UK LLP 55 Ludgate Hill, London EC4M 7JW Internal AudltOT5: BDO LI 55 Bakerstreet Ixjndon WIU 7EU Bankers: Barclays Bank PLC Level 27 I Churchill P]ace, London E14 5HP Sarttsnder UK PLC 3)￿ Floor, Santander House 100 Lud￿te HSIL Lortdon EC3M 7RE Lloyds Bank PLC 25 Gresham Stree¢ London EC2V 7HN Somdtors: Farrer& Co 66 Uncoln's Imi Flelds, London WC2A 3LH Penslon Scheme AdJDln15trators: Broadstone Pension5 and Investments Ltm5ted 100 Wood Stree¢ London EC2V 7AN Penslon SchemeActu*ry and Investment Advtsors: Lane C]ark & Peacock LLP 95 Wigmore Stree¢ L(Jndon. WIU IDQ Investment Managers (Prlze Funds).. BlackRock Investsnent Management (UK) limited 12 Throgmorton Avenue, tA)ndon EC2N 2DL THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC CONTENTS OF THE REPORTS AND ACCOUNTS Page Number Governing Bod*s Report [incoryoratlng the Stratsgic Report) 1-19 Statement of the Governing Bod￿5 Re5ponsibllltles 20 IndependentAudltorfs Reportto the Members and Governors of the Associatsd Board of the Royal Schools of Music 21-24 Consolldated Ststementof Financlal Activities 25 Balance Sheets 26 Consolidated Statement of Cash Flows 27 Notes to the Accounts 28-61 Pages 25- 61 comprise the financial ststements. THE ASSOCL4TED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE STRATEGIC REPORT) FOR THE YEAR ENDED 31 JANUARY2024 The members of the Governlng Body (the 'Governors?, who are also dire¢tor5 of the company. present their annual report [incorporatingthe Strategic Report) fortheyearended 31 lanuary2024, togetherwlththe audited finandalstatements fortheyearinaccordancewlththe CharitiesAct 1993 a5amended by the Charitie5 Art2011. Theyconfirnthatthese complywith the requirementsofthe CompanlesArt2006,the Companys Memorandum and Articles of Association and Accounting and Reporting by Charities.. Ststement of Recommended Prncti¢e applicable to charitie5 preparing their accounts in accordance with the Financial Reporting Stsndard in the UK and Republlc of Ireland (FRS 102). STATUS AND ADMINisfRATION The Associated Board of the Royal Schools of Music [ABRSM) Is a re8iStered charlty, number 292182 [Charlty registered in Scotland number.. SC043343), and a company limited by guarantee, registered number 1926395. esrabli5hed by four Royal Schools of Music for the benefit of music education. The company has no share capitsl and the Ilablllty of the members ln the event ofwinding up is limlted to £1 per member. The member5 are the Royal College of Music. the Royal Acaderny of Music. the Trustee5 of the Royal Northern College of Music Endowment Fund and the Trustees ofthe Royal ConseThatoSre of Scotland TrusL The charity ha5 a wholly owned subsidiary company, The Associated Board of the Royal Schoo]s of MusAc (Publishing) Limited IABKSM Publlshing). the results of which are consolldated in these financial ststements. GOVERNING BODY, CHIEF EXECWIVE AND MANAGEMENr srRUCTURE Forthe purposes ofthe CompaniesArt 2006 the Governors are the dlrectors ofABRSM. Theyare also the charity trustees underthe CharitSes Att 2011. The Governing Body isconsdtutsd underthe Articles ofAssoctation ofthe rnpany as drawn up in 1985 and amended on 26 july 2011. The amendment allows for three additlonal Independentmembers to loln the Governing Body. Membership of the Governing Body consists of ttvo persons appolntsd by earh of the Royal Academy of Music, the Royal College of Music, the Royal Northern College of Music Endowment Fund and the Royal Consetvatolre of Scotland Trus¢ together with three independent Governorsl and a Chairnian who is appointed by the member& New Governors are invited to meet Governors. the Chief Executive and other senior staff for thelr indurtion. These meetings are tailored to the needs of each Governor depending on their background. experience and expertise. The Governors In office from l February 2023 to the dats of thSs report are listed below and where appllcabl4 thelr alternate dITert0￿ ['AltsrnatesJ Governors Tony Hales CBR Chair, Frances Andersonl Abdul Bhanji OBEI Professor Jonathan Freeman-Attwood CBE Nicola Irvine (resigned 14 March 2024) l*slle Kwan Profe550r Colin lawson CBE Professor Linda Merrlck Alternates Karen DI LKJrenzo Kevin Porter George Whalley (resigned l March 2024) Deborah Hany (appointed 14 March 2024) GavSn Reld (appointed 14 March 2024) Professor jeffrey Sharkey Bronwyn Sylekl Baroness Fleet CBE Damian Wisniew5ki. Deputy Chair 1Ton Hales, FrancesAnderson,Abdul Bhan'i and Bronw n S iekare inde endent Governors. Page 1 THE ASSOCIATED BOARD OFTHE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 GOVERNING BODY, CHIEF EXECUTIVE AND MANAGEMENT ￿RuCTuRE (contSnued) Alternate5 are appointed by the Governor for whom they act They are entitled to attend vote and generally art on behalf of the appointing Governor at any Governing Body meeting where that Governor is not presenL Alternates are officers of ABRSM, rather than agents of appointing Governors. They are therefore subject to all terms and conditions, other than remuneration, existing wth reference to otherGovemors. Finance & Buslness Development Committee Members Damian Wisniewski. Chair Tim Barton Tony Hales CBE Rachel Harris Karen Di tA)renzo Bronwyn Syiek Audit & Risk Commlttee Members Abdul Bhanji OBE. Chair Frances Anderson Deborah Harry Alan Srnith Music Education Advlsory Commlttee Professor leffrey Sharkey, Chair Natasha Baldwin Carolyn Baxendale Francis Cummings Barry Farrimond Miranda Francis laura Gardiner Rylan Gleave Paul Harris john Hutchins Gabriel tee Tirn Plymin8 Orphy Robinson limmy Rotherham Bronwyn Syiek Simon Toyne Aled Tudor Matt Wingfield RemuDerdtion Comtnlttee Membe Bronwyn Syiek Chair Baroness Fleet CBE Professor lonathart Freeman-Attwood CBE Tony Hales CBE Nominatlons Conunlttee Tony Hales CBE, Chair Abdul Bhanji OBE Professor Colin Lawson CBE Professor Linda Merrick Ethlcs Commlttee Frances Anderson Key MaDagement Personnel The Ciovernors delegate the day-to-day management of ABRSM to the Chief Executive. and through him to his team of seniorexecutive staff. who iomprise the key managernent per50nnel.. Chris Cobb, Chief Executive Penny Milsom. Deputy Chief Executive Helen Colemart. Chief Operating Office?. Menyn Cousins. Chair of Chief Examiner Group james Halliwell, Chief Digital Officer Tom Lee, ChiefProdurt Officer [appointed l March 2023} Ilna Quinn. Finance Director (resigned 12 April 2024) Decislon Makln8 Proposals for developing ABRSM'S work are discussed and refined by this senior tea￿ Where appropriats they Tnay be reviewed by one of the specialist committees of the Governing Body, which include the Music Education Advisory Committee. The Chief Executive presents key policy and strategic proposals to the Finance & Business Development Committee, which review5 the financial implication5 of all proposals, and to the GoverDing Body for con5ider3tion. If agreed, these will be incorporated into the planned artivities of ABRSM. Page 2 THE ASSOCL4TED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 GOVERNORS, CHIEF EXECUTIVE AND MANAGEMENT ￿RUCfuRE (contlnued) DedsloD MaldD8 (Continued) l aspects of ABRSM'S work in support of Its charttable oblectlves are brought together In a Coryorate Plan which, together with financial prolertions. is rnonitored by the Senior Management Tearn and consldered by the Finance & Business Development Committee and then the Governin8 Body. The Corporate Plan sets out the stratsgic dlrertlon forABRSM in the rnedium term which 15 then communlcated to all stsff. The Flnance & Business Development Comrnittee is also responsible for the revlew of the forecas¢ budget and managementaccounts. Itmeets fourtSmesayearartd monitor5the finance5 ofABRSM onbehalf ofthe Governing Body. It exerdses oversight ofthe funding strats&v and related policies. The Committee will evaluate business cases for investment and monitor thelr benefits and ROI. The Finance & Business Development Committee comprises up to six members.. The Chair who shall be an ABRSM Trnstee: one independent Governor, up to two members co-optsd bythe members ofthe committee with relevant sldlls and experience to supw)rtthe ABRSM strategyand two Royal Schools of Muslc Dlrertors of Finance. The Audit & Risk CoTnmittee oversees rlsk matwement on behalfofthe Governing Body and rneets three tlmes a year. It provides assuran￿ to the Governing Body on the effecdveness of risk management control and governance arrangements. It also meets both the external and internal audltors to discuss the findln8s and recommendations from the audit reports. The Audlt & Risk Committee comprises four members.. two Independent Governo￿ and two Dlrectors of Finance from two of the Royal Schoo15 of Music. The Audlt & Risk Committee requires thatatleastone rnember should have rettnt auditandlor financlal accounting experience. ABRSM procures its Internal Audlt service from BDO LLP. The work ofthe Intsrnal Audit service is infornied by an analysis of risks to which ABRSM is exposed and an annual Internal audit plan is based on thls analysis. The AudSt & RSsk Commlttee approves the internal audit plan. BDO LLP submlt regular reports to the Audlt & Risk Committee on audits condurte(L Iisks identified and rnana8emenVs response to thelr l]Ddlngs, as well as theSr independent opinion on Internal controL The Nomlnations Commlttee is resNJn5ible for 5electlngand recommendingnewappointmentsto the Governing Body. The Music Education AdvisoryCommSttee Is an advlsory bodywhich supportsthe SenlorManagementTeamand Governlng Body to assure the mu51cal Integrlty, quallty and relevance of ABiLSM's offer fin the ¢ontext of a contsmporaryg]obal iandscape. The Remuneration Committee Is responslble for deterniining and implementlng the remuneration pollcy of the senior personnel. In doing so It considers remuneratton trends acr0$5 cornparable Institution5 as well as performance. The remuneration of the SEnior executlve staff is determlned through the completion of performartce related #sse5sments in line wlth company pollcy. The level is detsrn)Ined by evaluating a comblnation of perforn)ance and marketrate. The Ethlcs Committee is an adyisorybody which supports the SeniorManagementTeam and Governlng Bodyto C01151der the appllcatlon of ethical prlnclples toABRSM's dectsAons and artions. ABRSM'5 governance 15 Struclllred around the principles ofthe Charity Governance Code. The GovernlnB Body Is committed to revIe￿n8 Its governarttr 08xin5t the Code's PTinciples on a regular basis to ensure the highert standards of governance. Page 3 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT {INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 GOVERNORS. CHIEF EXECUTIVE AND MANAGEMEKf sTRU￿uRE (condnued) Governor< and officer￿ Llablllty Governors, liability ts Included In the combined business Insurance policy and is purchased by authorlty contained within the Memorandum and Articles ofAssociation, as permitted by Section 23212) ofthe Companies Art 2006 and with the agreement of the Charity CommissioxL The total cost of Governors, and officer￿ Ilablllty insurance was £403 (2023: £388)- CHARITABLE OBJECTIVES ABRSM has the following aims and objectives set out in its Memorandurn and Articles of Assoclation.. to advance the arts, science and skills ofrnusic, speeth and drama rhroughout the UK and over5eas.' and to promote the education and instruction in. and the study and appreciation of music. speech and drama. During 2021, ABRSM developed and irnplemented a new 5-year corporate strategy centred around ourongoing mission to enrich lives by inspiring musical achievementaround the world.A focus on the needs ofour customers is at the core OF our strategy, which is also guided by five key thernes.. educational excellence,. collaboration- leadership and advocacy.. equality, diverslty and inclusion,. and sustainability. Overthe nextthree years. ABRSM aims to be seen by our stskeholders to.. Value and 5UPPOrt our learners and teachers Be an innovator in music teaehing, learning and asse55ment Support and promote music education globally By lanuary 2026 we wlll have grown.. The number oflearners engaging wlth us Our charitsble donations The breadth of our artivities The followlng report explain5 in tnore detsil how our objectives are achieved. Our main measurements of success continue to be the level of candidate numbers and turnover. the delivery of key targets forthe launch of new products and services. digitally and in perso￿ and reducing our rarbon footprinL Page 4 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT ONCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 STRATEGIC REPORT PRINCIPAL A￿1v￿lEs ABRSM supports the tsaching and leaTning of music, in partnership with four Royal Schools of Music and alms to inspire achievementin music. We continue to deliver our strateBY guided by the three pillars of our buslness which underpln our mission to enrlch Ilves by irtspiring musical achievement around the world.. l. Muslc MakSng- Be Insplred We inspire and ttlebrate music malung and performance in our core role as a music education charity, embracing muslcal dlversity and creativity as we help nurture future generations of muslcian5. 2. Teachlng and Learnirtg- Be supported We 5UPPOrt muslc tsachers and learner5 and value thelr ongoing learnlng and development We are Introdudngnew courses and resources to supportexcellence in music tsachln 3. Qualification5 and Asse55ments- Be reco8nised We contSnue to grow our portfolio of qualifications to recognise a vAde range of muslol achievement embrxan8 increasingly diverse genres, actlvlties and learning setting& Oyr S-year corporate strategy remains focused on 5UPPOrting tsachers and learners, improvlng services for customers and expanding the diversity of the muslcwe offer. Sustainability continues to be an importanttheme, with our ongolng obffjectlve to reduce our carbon emlsslons In Ilne wlth the ParAs AgreemenL The Governors be]ieve that these actiirides contlnue to meet ABILSM'$ charitable oblectlves both ID the year under review and into the fU￿re. ABRSM'S Subsidiary, The Assoclated Board of the Royal Schools of Muslc (Publtshirtg) Limlte4 Is entaged In the productlonand sale of music publications, recordlngs and di￿ts1 resources in support of the charitable activities of ABRSM, both of exam related publi¢ations. and wider repertolre music and text-books supporting muslc educatio ACHIEVEMENTS AND PERFORMANCE Supportlng and recogntslng excellen￿ In muslc teachlng ABRSM supports teachers worldwide by developSng prlnted artd digitsl resources that complement our exam focussed books. recordlngs, apps and videos. and through a range of onlSne and face-to-face events and qualification& Our Teacher Hub wntinued to be 5ucce5sful, wlth 15,108 new registered users and 14 new free resources launched in the year. These Include the short RNCM cour5e'Assesslng Progress in Classroom Music, with fvrther such courses to be released this year. We are also currentlyworking on a redeslgn anda 5ub5equentrelaun¢h of the Teacher Hub. Expandlng and enhanclng the ways we support and assess muslcal progresslon The core activity of ABRSM. delivering music exams of a consSstently high quality both in the UK and internationally. continued during the year. We continued to develop our offer of alternative and new forniat onllne examlnations approved by Ofqual to meet our learners, needs both in UK and Internationally. There were 469,000 [2023.. 440,000) ABRSM assessments in 2023-24, an increase of 6.6% on the prioryear. Page 5 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE ￿RATEGIc REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 ACHIEVEMENTS AND PERFORMANCE (continued) We launched Teaching Diplomas in january 2024 for first assessment in October 2024,. these included a brand new ARSM Level 4 ag a fully accessible qualification. A key characteristic of these exciting new qualifications 15 that they are instrumentagnoslic. The emphasis is now on Music Teachin& and not instrumental/vocal, which widens their appeal considerably. Performance Diplornas launched in November Z023 for fiTSt assessmetjt in April 2024. These were redesigned to be contemporary in nature and vocationally relevant. Work included completely refreshed repertoire lists across 48 instrnments at LRSM and FRSM, a compensatory method of assessment. increased freedom of choice in programme design and a fully accessible offerwth wrrttenlspoken supporting evidence. The fitnctionality olthe examiner iPad app. Marcato. was updared to improve candidate experlence, data security and examiner experience. This app has reached a good level of maturity, as it relates to the current produrtoffer. and development needs are now reducing. A pilot of digital certificates was conducted and w35 an irnportant step in the realisation of our sustainability goals. New relationships were developed with research experts in the area of artificial intelligence and its development withtn the world of music. enabling us to prepare research projects for 2024-25 that will keep ABRSM fully infornied about opportunities and ethical questions in thi5 space. Most of ABRSM'5 qualificadons are formally reco8nised by the UK qualifications regulators.. St] England by the otyice ofQualification5 and Examinations Regulation [Ofqual}- in Wales by Qualtfication5 Wales.. and in Northern Ireland by Council for the Curriculurw Examinations and Assessment ICCEA Regulation). All our regulated qualifications are listed on Ofqual's Regtster of Qualification& The Governing Body Is responsible for oversèèing ABRSM'S compllance with the conditions of recognition as set by the three re8u13tor5. UKandlreland examlnattons During 2023-24 a total of 229.000 (2023: 213,000) assessments were completed for ABRSM'S Prartical, Performance Grade. Diploma, Theory and Music Medals qualifications in the UK and Ireland, an increase of 7.S% on the prior year. Assessments completed In Scotiand make up 2.5% ofthe total (2023.. 2.3Vol. A5 Part of our continued rebuilding Post-pandemic, we increased the number of UK public exam venues to 246. from 230 in 2023. We are assisted in ¢lelivering our examinations by volunteer Honorary Local Representatives [HLRs) who givo their valuable time to help arrange and ensure the smooth running of exams in the UK. At the end ofthe yearwe had 175 HLRS supporting our UK customers. In the year we reinstated UK centre visits to support new HLRS. or follow-up wsSts where we received queries or complaints. These visits will continue in 2024. There was no specific Representative training in 2023. but a programme of events is planned for 2024. Internationol examlnatlons Durlng the year a total of 240,000 (2023.. 227,000) international as5e5sments were completed for ABRSM'S Practical, Performance Grade, Diploma and Theory qualifications, an increase of S.7% on the prioryear. Significant growth was achieved in Malaysia (an incre3se of 32% to 37,500 candidates), India [1% to 27,000 catldidates), Indonesia (27% to 7.000 candidates) and Thailand (30% to 4.500 candidates). In 20Z4 we plan to introduce stsnd-alone visitexams to institutional customers in Euri>pe and add international school Y15Lts within public sessions in Indonesia and the Middle East. We also added a new exam centre in the US during 2023.24. Page 6 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSJC GOVERNING BODYS REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YK4R ENDED 31 IANUARY 2024 ACHIEVEMENTS AND PERFORMANCE (contlnued) Followlngthe successful pllotof Dlgltal Certlficates in two international territories, the￿ will be a global rollout in 2024, along with the addition of more automation to examlner exam schedulin& and the enablement of the earller release of Digitsl Theory Tesults for un-proctored candidates. New developments durlng the year, Included Perfom)ance Grades jazz lrtitial to Grade 5. and DrumkiL Atyear end we had 109 [2023: 112) international repTe5entatives, covering 76 (2023.. 73) ¢ountrle& Supportforlearners ofmuslc This year sawthe release of several new syllabuses. The Bowed Strlngs syllabus launched In lune 2023 at the European Strirtg Teachers Assodation conference In Cardiff. This encompassed new repertolre 1Ssts for all four Instruments with accompanying Exam Pieces publlcadons. The firsrassessments tookplace from january 2024. Jazz Perforniance Grades 1.5 syllabus launched in Ortober 2023 for fi￿t assessments in January 2024. jazz performers now have the same quallfication opportunities as western classical instrurnentalists. The same 5truLture has been utili5ed, exceptthe free choice fourth pSece whlch Is chosen from the published lists. The Singing for Musirdl Theatre syllabus also recelved an update whlch launched in December 2023 for Immedlate assessment This in¢ludedan additional 50+ piecesbeingadded which had been published duringthe year, helping to expand the ￿￿￿rial avallable for male volces, and recognlse the creative peak in composing during the Covid pandernic. DevelopmentolpublLfhed anddlgltalresourees Publishing turnover for the year [Includlng 5ntra-8roup char8es) was £6,833.000 [2023: £6,750.000). Thls year sawthe release ofnew Violin and Cello Exam Pleces Inlune 2023,and associated published anddigital resources, includinB a pilot release of selected Violin repertoire with the interactive sheet music platforn) Tomplay. Initial Grade produrts for Viola and Double Bass were also launched Sn lune 2023. Further matsrials to SUPPOrt theory exarn5were released Inlanuary 2024.The Publishingcompany results [includinglntra-group charges) prodU￿d a glftald payment of £807,000 {2023.. £606,000) to ABRSM. This year saw the continued development and Imprnvement of our range of apps Includln8 our Bowed Strings prarti¢e partners refresh for Cello and Violin which was released In lune 2023. We had to brlng all our digital apps and sites in line with the new brandln& whlch required engaBingexternal developer& Accesslbllltyond OnllneRuources We launched our refreshed brand and new websits Sn October 2023, developments that help us project our ture-facingidentityas a global musir education charity that exists to inspire a love of music. The ener8eticartd colourful new visual identity introduced through the new brand connects US to our heritage and established reputationatthe sametirne a5enabling us to communicats with broaderaudiences beyondourtradltlonalexams base andto have more Impartln d1￿] envlronrnent& Our trapline'Alffe with musld captures simplythe'wh behind whatwe do. In addSdon to our examination related on-line tools, we continue to develop our suite of resources for teacher5 via the websits along with face-to-face Interartlon. ABRSM'S webslte rea￿re$ lo¢altsed content for every county Inwhich we operdte and responds automad¢ally to each visitor's lo￿tion in order to provide local exam entry, contartand event Information. ABRSM. working c105ely with CTech, continues to develop and Implement the organlsatlon's atnbitious dlgltal tranSfOrn￿t50n programme. Sl8nificantworkwas undertaken during the year ontbe plannin& developrnentand implementstion ofABRSM's new Flnance systeni Unlt4 ERPA Includlng the integration wlth the CRM systsm. Unit4 ERPX wentlive on 2 April 2024. Pagè 7 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE STRATEGIC REPORT} (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 AcHIEVEmE￿s AND PERFORMANCE (continued) Partnering sts7teglcally to support, deliver and advocate for excellen￿ and partlclpadon In musSc education During the year. and for the first time stnce the Covid pandemlc, ABRSM made distributions to the four Royal Schools of Music. totslling £2m. After the year end and before the approval of these accounts, another distribution of £lm in totsl will have been Tnade to the four Royal Schools. ABRSM maintained scholarships for UK-based and international Students of the Royal Academy of Music, the Royal College of Music. the Royal Northern College of Music, the Royal Con5ervat02re of Scotland. the Royal Welsh College of Music and Drama and the Hong Kong Academy OF Perftsming Arts. A total of 87 [2023: 88) scholars benefited from ABRSM funding during the year. Sponsorship and donations for the benefit of music education arising in the year to 31 january 2024 were £2,291.000 (2023: £260,000). Scholarships awarded totalled El,379,000 [2023.. £1,372.000) and included: RoyalAcademy ofmuslc Raj Bhaumik is a firstyear Bachelor of Music studen¢ studyingthe clarinet. With the support of an ABRSM Scholarship, Raj Bhaumik has excelled in his first year at the Royal Academy of Music. This acadernicyear, Raj ha5 played in a Symphony Orchestra condvtted by Mark Elder, played Eb clarinet in the first woodwind department concert of the year (Mark-Anthony Turnage's'A Quick Blast.), and ha5 played in five clarinet master classes so far. He has also success￿1]Y auditioned for 5econd-study lessons on historical clarinets and forthe University of London Symphony Orchestra. Raj has established a wind quinte¢ clarinetand bassoon duo, and a clarinet and piano duo and the quinteL made up entirely of ex-NYOGB-principals, recently played their debut at Nutford House. He is currently preparing to play a full-length solo recital with piano at St Cyprian's Lenzie as part of their regular concert series. and the Brahms Clarinet Quintet at Ardkinglas House. Argyll. in April. In addition to his performanee schedule, Raj is contributingto lifeatthe Arademyas anassfistant woodwind tutor with the Academy's Widening-Participation departmenL Royal College ofmuslc Atnelia tawson is a third year Bachelor of Music student, studying the French hortL Amelia has had an excellent year as she continues to explore the hustle and bustle of beginning her career 85 a professional musician. At the RCM she has enjoyed parkncipating in a number of large orchestral projects. including a very well-received perforniance of Mahler I with the RCM Symphony Orchestra. condurted by Sir Antonio Pappano in January 2024. She has also taken partin various RCM Sparks projects, an initlative whereby all undergraduate Students at the RCM help lead sessions with the Cornrnunity and Outreach team. Outside of the RCM. she has had sxgnificant success Wlth her wind quintet. Aeolian Winds. In December 2023 the ensemble were invited by prestigious wind quintet Ouranos to join them in France for a week ofmasteTclasse5, seminar5 and lessons, finishing the weekwith a concerL Many of Amelia's external engagements include significant travel, and she expresses particular thanks to the ABRSM for their support of her studies. which gives her the financial security to tske part in these projects without worrying about money. RoyalNorthern College of Muslc lustine Cornjley is studying piano and has had a very succeSSfi￿ final yearat the RNfM. In which she wa5 invlted to the semi-finals OF Piano CaTnPUS international piano competition in Paris. and she has also booked an upcoming solo tour of England and Ireland including Bechstein centre Manchester. Chester. Dublin, BelfasL and Limerick lustine also began a placement with Olympias Music Foundation in February which has allowed herto workwith children's choirs and orchestra4 giving her a great platfornito further her profe55i0nal career. Page 8 THE ASSOCIATED BOARD OF THE ROYAL SCHOOIS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 ACHIEVEMENTS AND PERFORNIANCE (condnued) Partnerlng strateglcally to support dellver and advocate for excellence and partldpation In muslc educatlon (contlnued) Royol ConsrntDlre ofscotlond Yenglik Karassartova Is an Intsrnational undergraduate, 5tudyingthe piano. Yengllk has developed hugely. both in her technical prowess at the piano and also in her Ma￿rity as a musician. She ha5 participatsd in many importantKeyboard Showcase concertsatthe RCS and has alsoputherself fr>rward formasterclassesandcompetitions. Her￿torsaredelIEhted wlthherprogres5and speakveryhighlyofherwork ethic and her detsrnilnation to MaxIn￿Ze her potential 4$ a pianist and all-round musicia othersupportl0rmv￿¢EducattoD We have continued to work c105ely with partner organisations, policy makers and leaders to champlon rnusic education and open up opportunlties for more people to access and progress in music. Follomryng a 2022 revlew of our partnerships and sponsorship portfolio, 2023 represented the flrst full year of our rebalanced portfolio that included greater representatlon from a¢ros5 the UK more support for g)7ssroots muslc organisation5. and Tncreased sponsorship for organlsatlons outsSde the UK We condnued to 5UPPOrt the work of national youth muslc organlsadons, includingopen Up Musir. National Youth Choir, Natt'onal Youth jazz Orchestrd NatlDnai Youth Orchestra and Natlonal Chlldren's Orchestras of Great Britai￿ and collaborated with Muslc Marl4 Black Lives in Music. the Ivors Academy and Music Education Partnership Group (MEPG) to advocate for a high quality. acce55ible. diverse and inclusive muslc education. Our work with the Royal Philharnionic Society celebrated and championed classical music and the creation of new muslc by living composers. while we collaborated on location- or Instrument-speclfi¢ projects through our work with London MusSc Fund Trl-Borou8h Muslc Hub, Music Masters and PercWork5. In 2023 we launched Play On, to wcceed and replace ourlntsrnational Sponsorshlp Fund,wlth £40,000 in grants awarded to support the work of nine organisations from around the world. Available to non-UK organisations and projects and rnanaged by our partners The Commonwealth Resounds, Play On has been designedto help get innovative music projects up and runnlng. 2023 ￿CIpients included a sign language choirin the USA and ayouth choirin the Cayman Islands, organisations provldlng It￿ments and tuition across Africa projects in Indla and Kenya thatdelivermuslc rnakin8 In5chools. and a programme giving safe accessto music learning opportunities in Haiti. We established an exating new parthershlp wfith Rondo ProductioTh an innovative and Inclusive organlsatlon based In Malaysia thatprovides Opportunities for nextgeneration muslclans from across South EastAsia to take the next steps intheircareers.we supported their annual"RondoFest3nd Malaysian Wind Music Prize Inltiatives and tollxborated on theiryoung Composers Initiative. In 2024 we will conttnue OUT SUPPOrt forthese initiative& and will partner with Rondo Production to pllot a composer mentorlng programme for emerging composers based in South Ea5¢A5ia as partof RondoFesL In the programme5 space we have evolved our work to support the next generation of musician5. Our flagship comwser mentorlng progrnmme. Writing for Music Educatio￿ supported another six emergln8 composers explore the world of composing for educatSonal settings, and our focu5 for the year ahead 15 to expand the programme to reach composers based outside the UK Through our parthership with Black Lives lrt Music. we launched an examiner mentoring programme for musldans and music teachers from the global malorlty interested in a profrssion81 development opportunlty to prepare them for our fomal examlnertraining course. Pag• 9 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODVS REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 ACHIEVEMENTS AND PERFORMANCE (contlnued) Partnerlng strategically to suppor( dellver and advocate lor excellence and particlpatlon In music educadon (continued) One year into our pilot exam discount scheme. managed by Music Mark we have made some Changes to the scheme to promote greater awareness and engagement, and hope to reach more young people during the remainder ofthe piloL which runs through to july 2024. We also launched our inaugural Youth Advisory Board for young musicians based in the Comprisitlg 30 members bettveen the ages of 10 and 25 across lunior. Senior and Young Adults groups, the programme offers young people the opportunity to find out about ABRSM'S work up close. contrfibute their feedback and ideas to inform our produrt5 and services, and connect with other musicians from across the UIL In 2024 we plan to launch a Youth Advisory Board foryoung people based in South EastAsia, a5we look to further embed the voices of young people within the organisation. PrizeFuRds The endowment funds were establishedto provide prize5 for musical achievement in ABRSM'S examinations. All investments have been acquired in accordance with the powers available to the Governor5. Fundralslng The organisation does not engage in fundraising activities. Its income 15 derived from music examination fees and from sale5 of associated publications. Protectlng the planet for future generatlons We recognise a climate emergency is happenin& A5 a global organisation bringin8 musical achievement to a young audience, we have cornmitted to engage our staff and the wider ABRSM community to protect the planet For future generations. We are adapting our activities to reduce our impact on the environrnenL Our long term goal is to cut our GHG emissions in half by 2030 and reduce them to net zero by 2050. tfdcking the aims of the Paris Agreement tsn global ternpera￿re rise. During 2022 and 2023 we completed a carbon audit of the full scope of ABRSM'S activkties including our print publishing supply chain. We have also introduced DI￿￿￿1 Certificates by default with an option to purchase a printed ceitilicate. We continue to care￿][Y plan international tours and the deployment of locally-based examiners to remain on target FINANCIAL REVIEW The consolidated ststement of financial actLVLties is given on page 25 of the accounts. Total turnoverofABRSM and its UK subsidiaryfrom examination5, publicatiDns,tsachersupport3nd investment income for the yearamounted to £48.890.000 [2023.. £45.529,000). The increase in tuThovei' Tnainly arises from increased candidate numbetT for our assessments both in the UK and internati(Trnally. Turnover for our Publishing subsidiary also increased to £6,833.000 [2023.. 6,750,000). Net income for the year was £6,973,00012023.. É7,346.000). The perfomance of the publishing company is set out In note 6 to the accounts. The netincome is ststed aftercharging £2,079.000 (2023: £3,123,000) of amortisationcosts InlinewithABRSM' policy regarding the capitalisation of software development costs Inote 2h)- This 8mortisation relates to continuing development of our CRM system. Page 10 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE sfRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 FINANCIAL REVIEW (condnued) Wecontinued to improve ourdigitsl offeringby Investlng £2,075,000 [2023: £2.037,000) Inour CRM system and the new Finance sYstr￿ Unit4 ERPX. Increased cash receipts and hlgher Intsrest ratss have allowed us to increase the level of cash held on deposltto £22,300,000 (2023.. £13,050,000). This 15 held in various accounts with different rnaturity datss to maxirni5e re￿rnS whilst still allowing flexibility. The level of creditors due wlthln one year has Increased to £10,298,000 (2023.. £9,744.000). The total amount due to our International Representatives at the year-end has Increased to £2.561,000 [2023.. £1.639,000), due to tlmlngdlfferences on payment> The risks associated with our pension fund are well managed wlth repayments being made under the deficÈt recovery plan The penslon defidt has reduced to £1.796,000 (2023: £3,798,000). Golng Concern The strong perforniance ofthe Group durlngthe yearended 31 Jart￿ry 2024 has provlded a firni foundation for the fr>rthcomin8 yexr. A budget has been set for the following year which shows the Group generating a surylus for the year. A reforecast to the end of lune 2025 has also been prepared based on aLtral perfornllnce in the yearto April 2024 and adjustments for any known future changes. Under this reforecasL It Is experted thatthe Groupwill continue wlth net posStlve current assets and total a55ets. along with sufficient positive cash balances. The chartty has the resources to allow It to continue to invest in its digital prn8ramme to meet the changing Lwstomer needs. The tNstees therefore have a reasonable expeLtition that the charity has adequate reSOur￿S to continue in operdtionxl existence for the foreseeable fU￿re, being at least twelve months from the dats of approval of these flnanclal statements and are not awa￿ of any other material uncertainties which may adversely affett the organisatioTL Accordingly, the flnandal statements condnue to be prepared on the golng con¢ern basi& lttvestmentselectlon Pollcyand PerfortDance On the Incorporation of the Associatsd Board In 1985, It was decided that the publlshlng business of ABRSM should be traxsferred to 4 wholly owned subsidiary, The Associatsd Board of the Royal Schools of Muslc (Publishing) Limitsd. Thls company granted an unsecured loxn note to ABRSM as conslderation forthe transfer of the publishing busine55. ABRSM receives interest on thls loan notr a¢ 2% above the bank base rats. Addltlonally, the subsidiary company pay5 royaltse5 to ABRSM on copyrights owned by ABRSM. Flnally. it donate5 its taxable profits to ABRSM under a deed of covenanL which amounted to £807,000 (2023.. £606,000]. This is a long-tem investtnentbeldforthe benefitof ABRSM and Inte￿a￿dWIthbnABRSm'S operntions utili5ing the Intellertual property contsined in ABBSM'S syllabus IlsOn￿ whlch are periodlcally refreshe ABRSM occasionally recelves sums of money to provlde for prizes for candidates perfomiing well In Its examlnation& In order to malntain the re81 value of these gifts it Invests a sfignlficant proportlon of the Prize Endowment Funds in Blaciuock Charlties UK Bond and Equity Comrnon Investsnertt Fund5. At 31 January 2024 these had a cost of £879.000 and a market valuation of £1,666,000 (2023- É779,000 and £1,574,000 respectively), reflecting an Increase in marketvalue of 5.8% from the prioryear, [2023.. net decrease of 0.2%J. All other surplus Ilqu5d funds held byABRSM are placed on deposit to Safeguard the funds involved and to earn Intsrestuntil suchtlrneastheyare needed to meetthe expendibJrelnvolvedlnABRSM's operations The intsrest earned on these depos5ts during the yearwas £837.000 (2023: £164,000). Page 11 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODY'S REPORT (INCORPORATING THE ￿RATEGIc REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 FINANCIAL REVIEW {contlnued) Priniipal Risks and Uncertalntles The Governing Body is responsible forthe assessmentand control of the risks faced by ABRSM. Consideration of risks is delegated to the Audit and Risk Committee and managed on a day-to-day basis by senior staff. The Governors believe that awarenes5 of the key risks is the single most important element in ensuring that they are controlled. Risks are identified, assessed and controls maintained throughout the year. with a formal review of ABRSM'S risk management processe5 undertaken on an annual basis. In addition to the risk management and rnitigation artlons identified in the tsble below, ABRSM uses the following controls to rnanage rislL- formal agendas and minutes for all Governin8 Body and committee activity,. clear terms of reference for all committees- Finance & Business Development Committee. Audit& Risk Committee, Remuneration Cornmittee. Nominations Committee and the Music Education Advisory Committee., rolling programme of internal audit omprehensive stratsgic plannin& foreca5tin& budgetin& management accounting and variance analysis.. an established Èovernance and organisational strncture with clear lines of reportin formal written policie5. including staff policles readilyaccessible to all staff,. hierarchical authorisation and approval levels,. and review of cashflow forecasts In addition to the significant business and financial risks which, together with the miti8atingactionsare referred to in the Finanaal Review, key risks afferting the charity include.. Risks What are the key rffisk% facing ABRSM7 Martagement and mltlgatlon Whatls ABRSM doingtD reducethe likelihood or mlnlmSse the im artofthÈse risk8 occurrin Buslness Continuity and Disaster Recovery plans Cyber tittack, major Sncldent or technolo￿ failure leadln8 to loss uf dats and business Interruption Cyber Essentlals Plus Accreditstion and external review of 5yStem5 Mandatorysecurity trainingforall stsff Testln& scanningand phishing strategy MultifartorAuthentlcation for remote ar¢ess Automauc 3rd partysecuritypatch management Advanced Flrewall securlty Support contrart wlth PWC Deslgnated $Ècurfty role5 and responsibili1Ses Page 12 THE ASSOCL4TED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE ￿RATEGIc REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 FINANCIAL REVIEW (eontlnued) Rlsks Whatare thekry risks fadn8ABRSM7 Mana8ementand mltl8atlo What Is ABRSM doln8 to reduce the llkellhood or mlnlmlse the Im act ofthese rlsks occurrln 7 Involvement ofABRSM'svolee In the pollcydebate Changes to educadonal pollcy and change5 In sodal atUtude5 lead to a decllne Insultsblyskllled muslcteachers and the popu]at(ort of learners who can and want to make muslc suppo)￿n8 the Department ofEducatton PrD8resslon Fund Grants and partner5hlps wIth communlty musIc hubs and cenrres of excellence Maldn8 Muslclongltudlnal research and publlcatton Scho]arshlps and doDatlons Brand mes5agtngand PR Dlverslflcatton of muslc genres In syllabuses Teacher Hub eommunlty and CPD prO￿a￿me5 and resour Fallure to Innovate and move Into rtew Tnarket segments, leading to ABRSM products and setw1￿$ becomlng less attracttveand relevantto the market Customerand audlence InslBhtand engagement Communlrattons stratew/ Sales and marketitLg5trate&v Pr(￿UttdeyejopMeTht Page 13 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE sfRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 THE ABRSM PENSION AND LIFE ASSURANCE SCHEME (THE SCHEME) ABRSM operates a defined benefit pension scheme which c105ed to fu￿re accrual on 31 DeCern￿r 2018. The notional surplus or deficiton the ￿nding of the Scheme, calculated annually under this standard. is shown in the financtal statements a5 a designated fund entitled'Pen5ion ReseNe". This is dedurted from Unrestritted Funds in the balance sheeL The approximate actuarial valuation carried out at 31 lanuary 2024, as required by FRS 102, represents the market value of the assets of the Scheme as £40.3 million and the value of the liabilities at that date as £42.1 million (2023.. £42.5 rnillion and £46.3 million)- The net deficit on the Scheme of £1.8 million 12023.. £3.8 million) is a staternent of the transient situation at 31 January 2024. Both the Governors and the Trustees of the scheme recognise that such valuations can move significantly in response to market factors and the a¢￿arial assumptions made. The Governors F*cognise that the deficit arising under FRS 102 does not have a significant immediate cash-flow impact on the charity. The positive effect of the contributions made by the employer on the FRS 102 liability has been accompanied by a decrease in technical provisions as at 31 lanuary 2024. The disclosure of a pension liability. 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 furtherthe charity's objectives. The lasttriennial actuarialvaluationwas prepared asat 31 December2021 and showed a deficit of £12.3 millign. The Scheme closed to future accrual frorn 31 December 2018 and had already closed to new entrants, wlth certain limited exceptions. on l February 2014. A new defitht recovery plan was agreed by the Trustees in 2022. Under the plan, the Employer agreed to pay deficit reduction conthbutions of £2.75m per annurn for a period of 3 years and 4 months from I lanuary 2023 to 30 April 2026. The Employeralso agreed to pay all costs associated wlth rurtning the Schemeand to take over responsibility for Life A55urance arrangements with effect from l February 2019. RESERVES Our reserves comprise unrestricted funds and endowment fund& The endowed funds result from donations and legacies which can only be applied for a purpose specified by the donor and are not available for general purposes. These funds are used to award prizes to examination candidates in accordance with the criteria specified by the donor. Endowed funds total £1.7m at 31 january 2024 (notes 2t. 5 and 23). The unrestricted funds represent the accumulated surpluse& generated frorn general business activlties and are fund5 that are available for use at the discretion of the Governors. They comprise the fixed assets fund, deSIgna￿d funds and general funds (note 24). FSxed Assets Fund The flxed assets ￿nd comprises the fvnds ini'ested in fixed assets that the Ciovernors consider essential in enablin8US to implement effectively ouroperational strategy.The fund represents the net book value oftsngible and intangible fixed assets. l-he intangible 3ssets arise from snvestmentin ourdigital tran5forrnation pro8rnmme. Designated Funds Designated funds are funds that the Governor5 have eamiarked for 5pecifLi purposes. As at 31 lanuary 2023. £3.8m of ￿ndS remained that were designated tor the digital transformation progrdmrne. and a further £1.5m was transferred to this fund during 2023. Duringthe year. £1.9rnwas expended on the CRM and the new Finance system, Unit4 ERPX, with E3.4m remaining at 31 lanuary 2024 to be used forongoing digitsl transforrnation and international developmenL The £0.8m designated for ¥xaminer costs last year has been Increased to £l.Om at 31 January 2024. Page 14 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (NCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY2024 RESERVES (contlnued) General Funds In accordance with Charity Commission guldance, the GoYernor5 set a tsrget for the level of free reserve4 or general funds that we should maintain to ensure our financial security and fvnding of our business plan. Free reserves or general ￿ndS are defined as total unrestslcted funds less fixed assets and designated ￿nds. Since nwiy of ABRSM'S costs are d7rectty related to the number of examlnations held It is ABILSM'S aim to have sufficient Ilquid resources and cash balan¢es so thaL in the event of a doWn￿rn In the demand for Its services its operating costs, exduding costs dlrectly relatingto artivity [e.g. examiner fees and venue hire), would be met fora period ofsix month5.pIu5anyoutstanding liabilltie& Duringthis period, otheractions to mltSgate Ios5 would be implemented. Thls Implies the need for a level of free reserve5 of £13.2m [2023: £12.Im). As the Charfty Is wholly reliant on global trading conditions to generats Incorne. the Governors conslder that six months represents a reallstlcand prudent positio General fvnds stand at £14.6m at 31 lanuary 2024. This is an Increase of £4.9m or 34% on the prloryear [2023.. £9.7m) and is £1.4m above the mlnlmum level of general reseryes, which should ensure that we are able to continue to invest in our ongoing digital transforn)ation prO￿amMe and international development artivities, and meetthe short-terni growth objectives ouuined in our5-yearcorporats strate8y. The penslon Ilablllty represents the present value of the pension liabillties less the fair value of the pension scheme assets, calculatsd in accordance wlth FRS 102 [notr 311 and doe5 not imply a s5gnSficantconstraint over the use of reserves for the foreseeable fvture other than to ensure monthly contributions are meL which are budgeted for accordlngly. PLANS FOR FUTURE PERIODS General objectlves ABRSM will continue to condurtits operation5 tothehighestStandards, Includingall fornjs of onllne assessment rec0gnls1n8thatlnte￿￿ty3nd Smpartlailtyare fimdamentaltoABRSM'5 continuingsuccesLAll developments are evaluated for financial viab?lity to ensure sound cost and budgetary controls and tt) enable ABRSM to rnaximise Its contribution to muslc edu¢atton. ABRSM will ¢ontinue to use its influence In promoting music education generally. in accordance with its charftable misslon and wlll cOll￿nue to take steps to protect our environment by operating in ways that reduce our carbon footprint Shorttem obJecElves.' Our success￿] outcomes In 2023-24 contrlbuted to the consolidation of OUT recovery and enabled our investment in foundations for ￿tUre growth atthe mid-point in a five-year strategy. This places u5 well for workto target growth and prepare new offers in 2024-25 and to begin to realise growth through sales and emergingnew produtts from 2025-26. Our areas of focus In seeking growth continue to be: l. Identity and changing the narrative- estsb15shlng ourselves as a global music educatlon leader and charity, with a broadenlng product offer alongside a range of partnerships, scholarships and programmes thatsupport the next generation ofiearners, teachers. creators and collaborators. 2. Product portfolio and OUT relevance and reach- broadening the appeal of our existing products by expanding and diversifying our repertoire and the musical setknngswe include, servillgour contsnt through new di8itsl chartnels alongside our valued in-person products, realising new product opportunities to serve new market segments, and building our trainingand support offer for the global ¢omrnunity of music teachers. 3. Orgartlsatlonal capacSty- developing our ¢4pabilities and organisational expertlse in orderto be ture-facing and responsive whlle remalning true to our rn155i0n within music education. especially in areas 5urh a5 digital. seryi¢e delivery. produrt managemen¢ sales, markettngand data. Page 15 THE ASSOCIATED BOARD OFTHE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY2024 PLANS FOR FUTURE PERIODS (contlnued) long Terni Pluns.. During 2021. ABRSM developed and implernented a new 5-year corporate strategy centred around our ongoing mission to enrich livesby inspiring musical achievementaround the world.A focus on the needs ofourcustomers is at the core of our strategy, which is also guided by five key themes,. educational excellence.. collaboration,. leadership and advocacy. equality, diversity and inclusion.. and 5UStainability-. Create resources and ongoing training opportunities for music teachers in a variety of contexts, supporting their development. Build support for excellence in music teaching within schools by reco8nisin8 high-quality and Imaginative music-making. Collabordte partners around the world to promote the benefits of music education for all wherever we operate. Develop new assessments and resourcesthatquickly broaden our appeal to a wider and more diverse range of musician5 and accelerate our ability tt> offer products that help learners develop their Skills and make progress in music. Maintain and innovate our current qualifications and assessments. as well as the publications and digttal resources that support thern. Maintsin and develop new partnerships to advocate for the importance of music education and strengthen our ambassadorial network to promote music-making everywhere. Make donations tQ sponsor music eduration pro8rarnmes and scholarships in the UK and internationally. Set science-based targets that reduce our GHG erni55ions in line wlth Paris Agreement goals to keep g]obal warming to within 1.50C of pre-industrial temperature level5. Adapt how we operate in order to reduce our impact on the environment. Train and engage staff, contractors, partners and customers in our sustai[￿bIlity agenda. Our objectives highlight a renewed focus otl supporting music te3chers with professional development and the importance oftransforniing ourways ofworkingto ensure our business is environmentslly sustainable. Working in partnership with others in the UK and beyond, we will continue to promote the value of music education, celebrating the achievements of learners and highlighting the importance ofprogression in music. Our aim is to increase our ability to invest back into music education, both in the UK and internationally. PUBLIC BENEFrr The Governors have considered the guidance on Public Benefit published by the Charity Commission. The Governors believe that increasing the skills, knowledge and understanding of music provides benefit since the subject itself is of educational merit Additionallyj they also believe that the processes Involved in reaching the particular level of competence tested in one of ABRSM'S assessments deliver educational value of themselves. The benefits of increased musical skill are dlrectiy related to the chariws aims and no detriment or harni is considered likelyto arise from these activities. The Governors consider the beneficiaries to be a very wide range tsf people, insofar as the assessments offered by ABRSM are taken up in over 90 different countries throughout the world with manythou5ands ofcandidates both in the UK and worldwide. There is no age limit for those entering exams although the vast majority of the candidates are of.school age. Comprehensive arcess arrangements are in place to meet a wide range of needs. Page 16 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE sfRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 PUBLIC BENEFIT (contlnued) Anumberofexarn fees charged Internatlonally are based on local economlcconditions.ABRSM's onllne servlces, such a5 Play Orn Aural Trainer Lite and Melody Wrlter, are available at no charge Internationally. ABRSM will contEnue to support these innovative educational tools and develop addlttonal online tools to support music education. ABRSM also provSdes publlc benefit by funding scholarships and bursaries for5tudents at four Royal Schools of Music. Additionally. ABRSM provides sponsorship for other musical organSsatlons in the UK and internatlonally sublect to the availability of fund5. ABRSM'S Classical 100 resource for schools and the journeys Sub￿rIption appwere made freelyavailable to all through Pkny On in 2020. Buildlngon the succe55 of Classroom 100, Classroom ZOO was launched In April 2022, and was nomts￿ted forthe"Outs13nding Educatlon Resource" atthe Music & Drama Education Awards In 2023. ABRSM supports the Royal Academy of Muslc, the Royal College of Music, the Royal Northern College ofMu51e andthe Royal Conservatoire of Scot]and, which are charldes Intheirown right It doesthlsthrough the provlslon of scholarshlps and, Whe￿ possible. through distributions in the forni of donations. It also supports the Royal We15h College ofmusic and Drama and the Hon8 KongArademyof Perforn]ingArts. The public benefit dellvered byABRSM's support for these and othermu51c edurdtSon organtsations Ss set out on pages 8 to 10. The Governing Bod*$ RepDrt (incorporathig the Stsxts8i¢ Report) d¢monbtrats5 the way In whAcb ABRSM'S stratsgles support its objectives and provide public benefit ENVIRONMEHfAL IMPACT ABRSM is commltted to protectln8 our ertvRronment by increasingly operatin8 in ways that reduce our carbon footprin¢ harnessingtechnological developments to reach learner5 around the world. In compliance with the Streamlined Enery/ and Carbon Reporting (SECR) requlrements ABRSM is reporting on our eneryy use. ABRSM'S totsl UK ener&y use and greenhouse gas emtssloDs due to UK energy use ts shown below.. Year ended 31 january 2024 876,452 193,442 0.41 Year ended 31 January 2023 885,303 196,864 0.45 UK energy use O(Wh) Assoriated greenhouse gas emissions (kg C02 equlvalentj Intensity ratS0.. EmSsslons Or8 C02 equivalent) per examination The energy and em5s￿ons reported above arise from our office at 4 London Wall Place and car ￿e1. Inforniation regarding our office is derived from inforn]ation provided by our ener&y supplier who provSded elertricity and heating/cooling from a local comblned heat artd power facility. The amount of car fvel used is based on daims from stsff and examiners. The fit out of 4 London Wall Place achieved the Bronze standard SKA ratin& lightlng 5s controlled by infrared Sens0￿ and the beating and coollng System is timetabled. Durlng 2022 and 2023 we completed a carbon audit of the full scope of ABRSM'S artivities Including our wlnt publishing Supply Chai￿ We have also introduced Dl8ital Certificates by default with an Option to purchase a prlnted certlflcats. Pago 17 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE STRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 ENVIRONMENTAL IMPACT (contlnued) The delivery ofPrartical and Theory exams in the UK and around the world contributes most 5ignificant]yto the group's envirortmental Sn)pacL Examiner international tours for prartical exams are organised efficiently to reduce air travel to the minimum possible and emissions are monitored. We continue to carefully plan intertlational tours and the deployment of locally-based examiners to remain on targeL Our digital examinadons offering of Performance Grades and Online Theory remain popular since their launch in 2020. As examiners do notneed to travel for these exarninations, our energy use and associated emissiofLS are reduced cotnpared with traditional Fa￿ to face exarninations. The introduction of automated bookin& processing and marking of examinations in 2021 supplanted previous paper-based processes and significantly reduced paper consumption. However, in common wth other businesses who have moved their operations online. we are aware that the increased use of technology brings with it increased energy use by our sr3ff, examiners. teachers and learner5 in the operation of their electroni devices. Our published books and resources are made from 5UStainable sources. DIVERSITY AND INCLUSION Published in October 2020 and with quarterly Progress Updates available on tsur webslte, our Diversity & Incluslon Plan has continued in full strength and is central to decision-making aeross the organisatiorL We ran our third composer mentoring PTogramme in 2023, working with six composers from a wide range of backgrounds to explore the world of writingmusic foreducational settings. We worked with Black Lives in Music, the Ivors Academy and Musician< Union to recruit the cornp05ers, who collaborated with colleagues from ABRSM and sorne of tsur partner organisatioD5 as they composed music to briefs. including for exaTll Syllabuses and other educational contexts. Cornp05ers had the oppothnity to workwith the National Youth lazz Orchestra. Open Up Music. National Children's Orchestras of Great BritaiTh the OHMI Trust and Southbank Sinfonla durlng the programme, and we hope that some of the music composed durin8 the programme will be workshopped or performed during 2024. We also delivered a two-partworkshop series for composltSon students at the Royal We15h College of Muslc 3nd Drama, setting composers a brief to write for early grade piang and then returning to workshop the pieces and provide feedback. This Is part of our wider programme to support next generation cornposers and broaden the pool of composers we can collabor3te with and commission in the future. Page 18 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC GOVERNING BODYS REPORT (INCORPORATING THE sfRATEGIC REPORT) (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 SEcfioN 172(1) ￿ATEME ThIsSertio￿tOgetherWlththo5e pa8eslnrorporatedbyTeferen￿artsaStheABRSM.5SeLtsn 172(1) statemenL The Governo￿ have a responslbllity to act to promote the success ofthe ￿up wfith regard to the followlng matters (amongst others): The Ilkely consequences of any decision in the long tern] - Page 4 details how plans are prepared and updated The companys plansforfuture perlods arn srt outon pages IS to l& The Impact ofthe company's operations on the communityand the environmentare set out on Pages 16 to 18. The deslrablllty of the company malntsln5ng a reputatlon for hlgh standards of buslness conduct: ABRSM Is regulated by OfquaL the Charity Commisslon and OSCR and frdces competitlon In the n￿rkets in whlch It operdtes and therefore must ensure that it maintains the hi8hest standards consistentwlth its TeputatEon and hlstory. The need to art falrly a5 between men)ber5 of the company. Repre5entstives of each ofthe four members slt as Governors on the Governing Body, thus each member has the opportunity to be fully engaged in the decisions of the Governlng Body. The Governors recOw￿e thatln addltiontoABRSM's members. theyhave aresponslblllty to enw wlth other stakeholders. The Governors consider other maln stakeholders to be cand5dates and thelr parents, music tsachers, examiners, Tepresentatives. voluntser5and employee5. The Governtsr5 engagewith these stakeholders vla the senior leadershlp In a varlety of ways as follows: Candidates and thelr parents - We engage ￿$tOmerS through emalls and so¢ial media and maintsln Inforn)ation on upcoming exarn sesslons and new produrts artd services on the webslte. We run regular surveys to seek customerfeedback Music teachers - In addition to our communication thanne15 for ¢8rtdidates and their parents, ABRSM provides separate resources on Its webslts to supporttsacher& Speclaltstcourses and events are regularly held for tsaChe￿. ExamlneTS-A dedicated tsam engage examlners in policyand othercontinuous professlonal development events, as well as town hall style dlscusslons. Examlneronllne conferencesare a]so held annually. allowfing exaMIne￿ to engage with their peers andABBSM. Representstlvesand voluntsers- Contsctls malntslned through a dedlcatsd AB1￿m team and newsletters, training events and. webirtars. Employee5- The staff forurn Meets each week to discuss matters direttlyaffertEng staff. Thls group rneets wlth the Chief Executive and HR director on a quarterly basis to provide feedback An all sraff meettng IS held quarterly, to allow the senior leadershlp and others to provlde an U￿te on ongoing projects and Current Sssuesthataffectthem and ABRSM. The Governlng Botys Report [Sncorporatlng the Stratsgic RepKJrt] has been approved by the Governors on 27 lune 2024and signed on their behalf by.. Tony Hales CBE Chairman ofthe Governors Page 19 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC STATEMENT OF THE GOVERNING BODYS RESPONSIBILITIES The Governors (who are also dirertors of The Associated Board of the Royal Schoo15 of Music for the purposes of rompanylaw) are responsible for preparingthe GovernIn8Btsd￿S Report (incorpordtin8the Stratsgic Reportj and the finandal statements in accordance with applicable law and regulations. Company law requires the Governors to prepare financial statements foreach financial year. Underthat lawthe Governors have elected to prepare the financial statements in accordance with United Kingdom Generdlly Accepted Accounting Prartice {United KSngdom Accounting Standards and applicable law), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. Under company law the Governors must not approve the financial staternents unless they are satisfied thatthey give a true and fairview of the 5fate of affairs of the charitsble cornpany and the group and of the incoming resources and application of resources, including the income and expendlture. of the charitsble group for that period. In preparing these financial statements, the Governors are required to.. select suitable accounting policies and then apply them con5iStently- observe the methods and princlples in the Charities SORP IFRS 102).. make judgments and accounting estimates that are reasonable and prudenL' state whetherapplicable UK Accounting Stsndards have been followed, subjert to any matsrAal departures disclosed and explained in the financial ststements.. prepare the financial statements on the golng concern basis unless It Is inappropriate to presume that the group will continue in buslnes& The Governors are responsible for keeping adequate accounting records that are sutricient to show and explain the tharitable companys and 8roup'5 transactions and disclose with reasonable accuracy at any time the financial position of the charitsble company and the group and enable them to ensure that the finandal ststements comply with the CompaniesAct 2006, the Charities and Trustee Investment (Scotland) Art 2005. the Chartties Accounts (Scotland) Regulations 2006 (as amended) and the provisions of the trust deeiL The Governors are also responsible for safeguarding the a55ets of the charftable company and the group and hence for taiang reasanable steps for the prevention and detection of fraud and other irregularities. The Governors confirni thatr. so far as each Governorls 8ware, there 15 no relevantaudlt InfoTmation of which the chwTitable compan￿5 auditor is unaware., and the Governor5 have tsken all the Steps that they ought to have tsken as Governor5 in order to make themselves aware of any relevant audlt inforn￿￿On and to estabjishthatthe charitsble CoMpan￿S auditor is aware of that informatlon. The Governors are responsible for the maintenance and tntsgrfty of the corporate and financlal inforrnatlon included onthe charltsble compan￿swebS]te. iL*lation inthe Unitsd Klngdom8overningthe preparntionand dissemlnatlon of financial statements may differ from legislation in otherjuri5dittions. Page 20 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS AND GOVERNORS OF THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC REGISTERED cHAR￿y NUMBEtL. 292182 CHARITY REGisfERED IN SCOTLAND NUMBER: SC043343 COMPANYNUMBEIL. 0192639S Oplnloll We have audlted the llnandal statrrnents of the A55ociated Board of the Royal Schools ijf Mu51c (Ibe charltable comparf andlts 5ub51dlary Cthe group? forthe year ended 31 January 2024 which comprfse the Consolidated Statement of Financlal Actlvities. the Group and Charity Balance Sheets, the Con501idated Statement of Cash Flows and notes to the ftnancial ststements, including significant accounting policies. The finanaal reporting framework that has been applied In their prepajxtion is appllcable law and United Kingdom Accounting Stsndards including Flnancial Reporting Stsndard 102 The Finanaal Reporting Standard applicable In the UK and Republic of Ireland (Unitsd Kingdom GenerallyAccepted Accounting Prarti¢e). In our oplnlon the financial statements.. give atsueand falrTAewofthe ststs ofthe group's andthe charitsb1ecompan￿S affalrs as at 31 January 2024 and of the group's and the charftable company's Income and expenditure. for the yearthen ended; have been properly prepared in accordance with United Kingdom GenerallyAccepted Accounting Practice: and have been prepared in accordance with the requirements of the Companles ALt 2006 and the Charitie5 and Trustre Investsnent (Scotland) Act 2005 and Re8ulations 6 and 8 of the Charities Accounts (Scotland) Re8ulatlons 2006 {amended). Basts for oplnlon We conducted ouraudlt Inacconlance with Internattonal StandardsonAuditing IUK) [ISAs (UK)) and applicable law. Our responslbllltles under those standards are further descrlbed In the AUdit0￿S responslblllties for the audlt of the finandal statements sertion of OUT report We are independent of the charitable company and the group in accordance with the ethical requlrements that are relevant to our audit of the financlal slatsments in the UK Includlngthe FRC'S Ethical StaI￿ard,and we have ￿lfilled ourother ethical responsibilitiesin accordance with these requirements. We belleve that the audit evidence we have obtsined is sufficSent and approprfate to provide o b#$l$ forour opinion. Cimcluslons relatlngto golng concern In auditing the financial 5fatements. we have concluded that the tThstee's use of the going concern basis of accounting In the prepara￿On of the financial statements 15 appropriate. Based on the work we have performe(L we have not identified any material uncertainties relatSng to events or condlttonsthaL Indlvldually orcolletttvely,may¢astsi8nifi¢antdoubtOTJthe charftable ￿MPany's0rthegr0llp's ability to continue a5 a going concern for a perfod of at leasttwelve months from when the financial ststements are authorlsed for Issue. Our responsibilities and the responslbSllties of the trustees wtth respert to 8olng concern are described In the relevantsectlons of this report Other Inforniatlon Thetrustees are respo]]sible fortheotherinforniadon contsined within the annual report The other1nforn￿tsoD comprises the infornutlon Includedln the Annual repor¥ other than the financial statements and our audltorfs report thereoTL Our opinion on the financial statements does not cover the other inforniation and, except to the extent otherwlse expllcitiy stated In our reporL we do not express any forni of assurance Conclusion thereon. OUT responsibility 15 to read the other 5nformatSon and Sn dolng so, consider whether the other Infonnation Is matsrfally Inconslstent with the financial statements or our knowledge obtained In the audit or otheThv&se appears to be rnaterially mi55tated. If we identify such matsrial inconslstencies or apparent material misststements, weare requlred to determlne whetherthis gives rise to a material mlsststement in the financial statements themselves. If, based on the work we have perfornied, we con¢lude that there is a matsrial mtsstatementof thls other Infomatiorn we are required to reportthat facL We have nothing to report In thts regard. Page 21 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS AND GOVERNORS OF THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC (CONTINUED) REGI￿ERED CHARITY NUMBER: 292182 CHARITY REGisfERED IN SCOTIAND NUMBER: SC043343 COMPANY NUMBER: 01926395 Oplnlon OD other matters prescrlbed by the CompaniesAct 2006 In our opinion based on the work undertaken in the course of our audit the infornlltion given in the trustees. reporL whlch Includes the directors. report and the stratsgic report prepared for the purposes of company law. for the financial year for which the finaneial statements are prepared is consirtent with the financial statsments., and the strategic report and the dirertors. report induded within the trustees, report have been prepared In accordance with applicable legal requirements. Matters on which we are requlred to report by exception In light of the knowledge and under5tsnding of the group and charitable company and their environment obtsined in the course of the audiL we have not identified material misstatements in the strategic report or the directors, report induded ￿thin the trustee5' reporL We have nothing to report in respert of the following matters in relation to which the Companie5 Act 2006 and the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion.. adequate and properaccounting records have notbeen keptor returns adequate forouraudit have notbeen re￿iVed from branches not visited by u5., or the financial statements are not in agreementwith the accounting records and returns.. or certain disclosures of trustees, remuneration Specified by law are not made.. or we have not received all the inforniation and explanations we require for our audiL Responsibilities of trnstees As explained more fvlly in the trurtees, responsibilitie5 Statement set out on page 20. the trustee5 {who are also the directors of the charitable company forthe purposes of company law) are responsible for the preparation of rhe financial statements and for being satisfied that they give a true and fair view. and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from rnatejlal misstaternenL whether due to fraud or error. In preparlngthe financial staternents, the trustses are responsible forassessingthe charitable COMpan￿S abi]ity to continue as a going concern, disclosin& as applicable, matters related to goitlg concern and using the going concern basis of accounting unless the trustees either intend to Ilquidats the charitsble company or to cease operations. or have no realistic alternative but to do so. Page 22 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS AND GOVERNORS OF THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC (CONTINUED) REGISTERED CHARITY NUMBEIL. 29Z182 CHARITYREGISTERED IN SCOTLAND NUMBER: SC043343 COMPANY NUMBER: 0192639S Audltofs responslbllltiesforthe audlt ofth¢ Ilnandalstatements We have been appointed as auditor under section 44[1)(c) of the Charities and Trustee Investment {Scotland) Act 2005 and under the Cornpanies Art 2006 and report in accordance with the Acts and relevant re8ulaUons made or havingeffertthereunder. Our oblertlves are to obtsin reasonable assurance about whether the financial ststements as a whole are free from matsrial rnjsstatemen( whether due to fraud OT error. and to tssue an auditorfs report that Indudes our oplnlon. Reasonable assurance is a hlgh level of assurance. but is not a guarantse that an audSt condurted in ccordance with ISAS (UK) will always detert a material misstatsment when it exists. Misstatements can arise frorn fraud or error and are considered rnaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic decislons of users taken on the basis of these financial statsments. Detai15 of the extent to whlch the audit was considered capable of detectlng irregularltles, Including fraud artd non-¢ompliance with laws and regulations are setout below. A fvrther descrlption of our Te5ponsibilltles for the audlt of the financial statements Is located on the Flrtancial Reporting Council's webslte at www.fvc.or&uk/auditt>rsresponsibilities. Thls do5CriPtion fornis part of our audltows reporL Extent to which the audlt was coD51dered L3pable ofdetertlnglrregularItls Indudlngfraud Irregularities, includ5ng fraud are instances of non-compllance wlth laws and reguladons. We Identified and assessed the risks of material misstatementofthe financial staternents from irregularities,whether due to fraud or eryor, and discussed these between our audit team members. We then designed and perfomed audit procedures responsive to those rtsks, Including obtsiningauditevidence suffident and appropriate to provide a basts for ouroplnlo We obtalned an understanding of the legaland re8ul8toryframeworkswithin whlch the charftsble companyand group operates, focuslng on those law5 and regulatlonsthathave a direrteffect on the deterniinatlon of material amounts and disclosures In the financial statements. The laws and regulatlons we consldered in this context were the Companles Act 2006. the Charities Art 2011 and The Charitie5 and Trustee Investment (Scotland) Art 2005 together wlth the Charitie5 SORP [FRS 102). We assessed the required compliance with these laws and regulations as part of ouraudit procedures on the related financial statement Stems. In addltioTh we consldered provisions of other laws and regLtlations that do not have a direct effect on the flnanclAI statements but compliance wlth wbich might be ￿ndamental to the ¢haritsble compan￿5 and the group's ablllty to operate or to avold a rnaterial penalty. We also considered the opportunitles and Incentive5 that may exist within the charitable company and the group for fraud. The laws and regulations we considered in this context forthe UK operation5 were General Data Protsction Regulation [GDPR), OFQUAL compllance and Health and safety le*sladoA We also con51dered compliance wlth local legislation for the group's overseas operatlng segments. Auditill8 Stsndards limit the requlred audit pr(Kedures to identify non-compliance wlth these laws and regulations to enquiry of the Tn￿teeS and other management and Inspection of regulatory and legal correspondence, if any. We 5dentlfled the 8reatestrlskof material imparton the finandal statements from irregularities, including frauiL to be within the timing of recognltlon of exam fee income, the estimation of tsx provisions and the override of controls by management Our audlt procedures to respond to these risks included enquiries of managemenL internal audiL legal counsel and the Audit & Risk Committee about their own identificatSon and assessment of the risks of irregularities. sample tsstlng on the Posting of journals. reviewing accounting estlrnate5 for biases, reviewing regulatory correspondence with the Charity Commisslon and reading rnlnutes of meetings of those ¢harged with governance. Page 23 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS AND GOVERNORS OF THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC (CONTINUED) REGisfERED CHARITY NUMBEIL. 292182 CHARITY REGISTERED IN SCOTIAND NUMBER: SC043343 COMPANY NUMBEK. 019Z6395 Owkng to the inherent limitations of an audi¢ there is an unavoidable risk that we may not have detected sorne material misststements in the financial statements, even though we have properly planned and perfomed our audit in accordance with auditing standards. For example, the further removed non-compllanee with laws and regulations (irregularities) is FroTn the events and transactions reflected in the financial statements, the less likelythe inherently limited procedures required by auditing standards would identify it In addition, as with any audi¢ there remained a higher risk of non-detection of irregularities. as these may involve collusion. forgery. intentional oTnissiDns, misrepresentations. or the override of internal controls. We are not responsible for prevertting non-compliance and cannot be expected to detsct non-compliance with all laws and regulations. Use ofour report This reportis made solely to the charitable compan￿$ members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. and to the charitsble compan￿5 trusteés as a body, in accordance with Regulation 10 ofthe Charities Accounts (Scodand) Regulations 2006. Our audit work has been undertaken so thatwe might state to the charitable cornpany's members those matters we are required to stats to them In an auditovs report and for no other purpose. To the ￿lIest extent permitted by law, we do not accept or assurne responsibilityto anyone otherthan the charitable company and the charitable coMpan￿S members as a body and the charitable Cornpangs trusrees as a body, for ourauditworK for thls report or for the opinions we have forn)ed. Naziar Hashemi Senior Statutory Audltor For and on behalFof Crowe U.K LLP Ststutory Auditor London 3 July 2024 Page 24 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC CONSOLIDATED sfATEMENT OF FINANCIAL ACTIVITIES (INCLUDING AN INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 IANUARY 2024 UnTestri¢ted Ptnslon EDdowment Funds Reserve (note 31] riNJo roDO Funds 2024 rooo Fund5 2023 rooo Notes INCOME& BNDOWMBNTS FROM: Charltableacllvltles Examlnattons Teacher Support Other tradI￿￿etIVItIes. Publlshlngsales thvestments Other 41.099 14 41.098 14 38.546 6,829 837 54 60Z9 6,746 218 16 58 54 Totsi Income 48.832 58 48,890 45.529 EXPENDITURE ON: CbarttsNe Artlvltles ExamSnadons TeaclLerSupport 5th0￿lSh5pS Muslceducadon OthertrHdlll8 acdvlde* Pub]tsMn8 34.755 442 1,379 2.291 {2,749) [iJ 17 32,023 441 1379 2,291 30.238 390 1,372 260 7,10 5.666 5,666 5,750 44￿33 (2.750) 17 41,BOO 38,010 Pen51onlln8nce dwBe 109 109 169 Totsl expendlture 44￿33 (2ffj41) 17 41.909 3B,179 Net Ooss)Ipln on Investtnent 16 18) (8J 14) N¢tlDcorn•I(ezpendltstre) 4.299 2,641 33 973 7.346 OtherrecoKnlsed K*JnslOosses): Attuarlal [l0ss)18atnon peDslon scheme 31 (6391 (639) 1,893 N•tmovement In funds 4,299 2,002 33 6,334 9,239 RECONCIUATION OF TriINDS: Balartcebrought fojward NetmovementlD fund5 19,27S 4,299 13.7981 2,002 1,691 33 17,168 6,334 7,929 9.239 Fwid lJaIan¢estanled fonvBTd. Indudlu8 penslon reserve 23,24 23.574 11,796) 1.724 23,502 17.168 For Companles Art purposes, consolidated gross Income forthe financial yearwas £48,832,000 (2023.. £45,475.000), consolidated ￿OsS expendlture was£41,892.000 (2023.. £38,176,000) and netprofitwas £6.940,000 (2023.. £7,299,000). All Income Is derived from condnulngoperntlons The notes on pages 28 to 61 forni part of these accounts Page 25 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC BALANCE SHEETS ASAT 31 JANUARY 2024 Group 2024 £'ooo Charlty 2024 rooo 2023 £'ooo 2023 £'ooo Notes FIXED ASSErs Tangible assets Intang5ble assets Investments 14 15 16 1,255 3,349 1,666 1,677 3.366 1,574 1,255 3.349 Z,448 1,677 3.366 2,356 6.270 6,617 7.052 7,399 CURRENT ASs￿s Stocks Debtors Investments Cash at bank and in hand 17 18 19 704 3.724 22,300 5.296 831 4.164 13,050 8,235 5,321 20,550 4,704 5,549 12,050 7.276 32.024 26.280 30.575 24.875 CREDITORS.. amounts falling due within one year CURRENT ASSErs 20 (10.298) (9,744) (9.640) [9,131) Zl.726 16,536 ZO,935 15,744 TOTAL ASs￿s LESS CURRENT LIABILrriES 27.996 23,153 27.987 23,143 CREDITORS.. amounts falllng due after more than one year PROVtSlONS 21 22 (561J (2.137) (544) (1.643) (561) (2.137) (544] (1,643) N￿AsSETs EXCLUDING PENSION LIABILITI 2S.298 20,966 25,289 20,956 PENSION FUND DEFICIT 31 (1.796) [3,798) (1,796) (3,798) TOTAL NET ASSErs 23.502 17.166 23.493 17.158 THE FUNDS OF THE GROUPICHARITY.. Endowment funds Unrestrirted fund5 Pension reserve 23 24 31 1.724 23.574 (1.796) 1.691 19,275 (3.798) 1.724 23,565 (1.796) 1.691 19,265 [3,798) TOTAL FUNDS 25 23.502 17,168 23,493 17,158 The net Income of the chatlty for the year was £6,974,000 (2023.. £7,347.000) Approved by the Governing Body on 27 lune 2024. Tony Hales CBE Chairman of the Governors Registered Charity Number 292182 Charlty Registered in Scotland Number SC043343 Company Nurnber 01926395 The notes on pages 28 to 61 forni part of these accounts Page 26 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 IANUARY 2024 2024 rooo 2023 £'ooo Notes Casb flowsfrom operatln8 artlvltles Z6 7ffj35 6,547 Cash flows from InvestlngactlTltles Interest Income Purchases of fL¥ed assets Purchase of fixed asset investments Purchase of currentasset investsnents (wlth maturlty 8re#terth8n 3 months) 89S (2.086) (ioo) 218 (2,339) 14.15 (9,750) [2,562) Net ¢Asb used In Invesdng attlvltles (11.041) (4,683) Cash flows from flnandn8artlvltles New finance lease obllgations Repayment of finance lease obllgatjons (33) [66) Net fash used In flnandn8artlvltles (33) [66) Net Increase/(decrease) In cash and cash equivalents (3.439) (1,798) Cash and cash equlvalentsat l February 2023 Cash and Lasb equlvalents at 31 lanuary 2024 14285 10,846 12,487 14,285 27 Analysts of cash and equlvalents.. Cash In bank attd in hand Deposlts and notice accounts (less than 3 months) Total osh and casb equlvalents 5.296 8,235 27 10.846 14,285 The notes on pa8es 28 to 61 forni part of these accounts Page 27 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 JANUARY 2024 COMPANY INFORMATION ABRSM is a charitable company incorporated in England and Wales with registration number 01926395. Its registered office is 4 IA)ndon Wall Place. London, EC2Y SAU. ACCOUNTING POLiaES The ptincipal accounting policies adopted. judgements and key sources of estimation in the preparation of the financial Statements are 35 follows.. Basts ofprepardtion The financial ststements have been prepared in accordance with the current Ststement of Recommended Practice'Accounting and Reportitlg by Charities. (the Charities SORP [FRS 102] issued in October 2019, the Financial Reportingstsndard inthe UKand Republic oflreland (FRS 102) andthe CompaniesAct 2006. The presentstiunal and functional currency is Sterling [£). ABRSM meets the definition ofa public benefit entity under FRS 102. The financial statements have been prepared under the historical cost convention, with the exception of investments, which are included at market value. Preparation of the financial statements requires management to make slgnlficant judgements and estirnate5. The items in the financial ststements Whe￿ these judgments and estimates have been made are lirted below.. Significant ludgements or estimates Policy reference Note reference The followingare considered to be significant estimates in the preparation ofthe financial statements.. Amortisation 15 22 Tax Provision Scholarships commitments Defined Benefit Pension Scheme 28 31 Explanations of the estimates relating to the above items are given in the relevant policy. Page 28 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 ACCOUNTING POLICIES (CONTINUED) b) Golng Concern The strong perforn￿nCe of the Group during the year ended 31 lanuary 2024 has provlded a firm foundation forthe forthcomlngyear. A budget has been set for the followin8 year which shows the Group generating a Surplus for the year. A refoTecasttt>theend of lune 2025 hasalso been prepared based on artual perforniance Intheyearto Aprfl 2024 and adlustsnents for any known future changes. Under thSs refore¢as¢ it 15 expected that the Group wlll contlnue wlth net positive currenta55ets and total assets, alongwith sufficientpositive cash balances. The charlty has the resources to allow it to invest in its digital progrnmme to continue to meet customer need& The trnstses therefore have a reasonable expertation thatthe charity has adequate resources to contlnue In operational existince forthe foreseeable ￿￿re, belng at leasttwelve months from the date of approval of these financlal statements. and are not aware of any othermaterial uncertainties which may adversely afferttheor88nisation.Accordingly,thefinanclalstatsmentscontinuett)be prepared onthe going concern basi& Group flnanclal staten)ents The consolidatsd accounts Incorporate the accounts of the charitsble cornpany and Its subsldiary (together, Ihe grourf) made up to 31 Januaryeachyear. The results of the trading subsidiary company are presentsd in the con501idatsd SOFA by disclosing the Income andexpenditure derived from its tradingactivities carrjed outsepardtely fromthose olthe charity. A summary profit and loss account for the subsidiary is shown in note 6. The subsidiarycompangsassets and Ilabllldes are consolidated in the balance sheet on a Ilne by line basls. d) UK examllladoD ftes and expense5 Examination fees and expenses arising in the UK are credited or charged In the sratement of flnandal activities duringthe accounting period in which such examlnations take place. Internatlonal examlnadons Where examinations take pla¢e online exaTninatlon fees and expenses Incurred in the UK are credited or charged in the statement of flnancial activitie5 during the accounting period In whi¢h such examinations tsk¢ place. CornrnL55ions due to local representstives in respect of online examinatAons are included in their representative r￿rnS as detsiled below. Where examinatlons are held lo¢ally these results are prepared from return5 and annual accounts submltted by ABRSM'S local repre5entatlve4 whlch are nrt necessartly made up to 31 january each year butthe effect of diffÈringaccountin8 dates is notconsidered by the Governors to be significanL In the rare case that the amounts owed cannot be recovered a bad debt provision is rnade. Teacher support Trainlng course fees and expense5 are credited or charged in the statement of finandal activitie5 during the accounting period In wh5ch such courses tske place. Page 29 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 ACCOUNTING POLICIES (CONTINUED) Expendlthre All expenditure isaccounted foron an accNals basisand has beeTtclassified underheadings thataggregate all costs related to the category.Where costs cannotbe dirertly attributedto particular heading5 they have been allocated to artivitie5 on a basis consistent with the use of resources. Overheads are apportioned either on headcount. turnover, stsff occupancy of accommodation area or usage basis as considered most appropriate. Expetiditure include5 input VAT to the extent that Lt is irrecoverable. Dlrect charitable expenditure comprtses servlces identifiable as wholly or malnly in support of ABRSM'S harhtable and operational work These costs are regarded as an integral part of carrying out ihe dirert charitable objectives of ABRSM and include an appropriate proportion of overhead costs. Governance costs are those incurred Sn connection with the administration of the charity and compliance with constitutional and statutory requirements. These costs have been apportioned across expenditure on charitable activities based on turnover except where the cost can be attribured to a specific activtty. h) Computer software development Expenditure on computer software developlnentis capitalSsed and amortised over a 3 year period. i) Scholarshlp awards All scholarships offered by the balance sheet date for the current academic year are provided in fitll. Awards for future years are subject to review and authorisation by ABRSM each year and are disclosed as commitments in note 28. The future commitments are esknmated based on continued funding of the current Students in receipt ofa scholarship to theend of their academicstudies plus newstudents starting their studies based on current funding patterns. i) Employee benefits Short-term employee benefits. including holiday pay and contributions to the defined contrlbutlon pension scheme are recognised as an expense in the period in which they are incurred. The defined benefit scheme closed to fu￿re accrual on 31 December 2018 and employees transferred to the defined contribution pension scheme on I January 2019. Contribution5 to 31 December 2018 in respect ofthe defined benefitscheme are charged to salary costs for respecrive activities in the statement of financial actlvlties. The arnount5 recognssed in the statement of financial activities including any artuarial galn or loss are estimated based on the requirements of FRS 102. and are fully explained in note 31. k) Tangible fixed assets Depreciation 15 provided on cost at the following annual rates in order to write off each asset over Its estimated useful life:_ Short leasehold11￿ nd and bu51dings over the remaining life of the lease to the lease break point 330/0 2.9%- 33% Computer equkpment PlanL fixtures and equipment Expenditure on furniture and eqviprneni not exceeding £l,DOO in total and all expendlture on repairs and maintenance is written off in the year in which it LS incurred. Page 30 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACcOU￿s (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 ACCOUNTINGPOLICIES (CONTINUED) i) Intan8Ible fixed assets In accordance wlth FRS 102 software developmentcosts have been recognised asintanglble assetsasthey can be identified with a project anticipated to produ￿ future benefit& On initial recognitiorn assets are measured at¢ott and in¢lude all costs dirertly attiibutable to brlnglng them into worldng condition. Amortisation is provided on cost at the followIng annual rates in order to write off each asset over Its estlmatsd use￿1 lire:. Software development 33% Investments The Investment In the wbsldlary company is valued at cosL Fixed 4$$et inv¢5tments are included in the balance sheetattheir marketvalue at the end of the finandal period. Realised and unreallsed gains and losse5 are creditsd or deblted to the statement of financial activities in the year in which they arlse and a￿ based on brought forward values. Current asset investsnents conslst of treasury deposits and notice accounts wlth maturity and notlce to withdraw ofless than ayear. ased assets Leases are classlfied as flnance leases whenever the ternis of the lease ts7n5frr substantially all the risks and reward5 of ownershlp of the leased asset to the group. All other leases are ¢las5ified as operating leases. Assets held under finance lease5 are recognised inltially at the fair value of the leased asset (or, if lower, the presentvalue of minlmum lease payments) atthe inception ofthe lease. The correspondlng liabilityto the le550r i5 included in the statement of financlal position as a finance lease obllgation. tease payments are apportloned between finance chargesand reduction of the lease obllgation usingthe effective interest method so a5 to achieve a constsnt rate of interert on the rernaining balance of the liabllity. Flnance charges are deducted in measuring profit orloss. Assets held under finance leases are included in tangible fLxed assets and depreciated and assessed for impairnient losses in the same way as owned asse Rentals applicable to operattng leases, where substantially all of the benefits and risks of ownership remain with the lessor. are charged to the statsment of flnancial activities on a straightllne basis over the lease tenn. The aggregate benefit of any lease incentives are recognlsed as a reduction to the expense charged over the lease tern] on a straightline basls. Publlcadonsstocksarevalued atthelowerofcostand netreallsablevalue.Forprinted music, ¢ostisbased on the unitcostof productlon foreach publication. Work in progres5 at printers is valued atthe costof the paper used and 15 included in paper stocks. In estimatlng net realisable value, due allowance is made for slow-movin& obsolets, defertlve and unsaleable items. Origination costs are charged to revenue In the year in which they are incurred. p) Rates of ex¢hange Assets and liabilities in forelgn currencies are converted iTtto sterling atthe rate of exchange rulln8atthe balance sheet date. All income and expendlture Is converted at daily exchange rates. All differences on exchange are dealtwlth through the net movement in fijnds forthe year. Pege 31 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 ACCOUNTING POLICIES (CONTINUED) Financlal Instrnments Basic financial assets and liabilities such as short term debtors. creditt>rs and bank balances are Snitially recognised at fair value less any impairment and transacdon costs and subsequently measured at thelr settlement value. Prize Endowment Funds invested in Charinco and Charishare Common Investment Funds are canied at fair value. Deferred in¢ome Examination and course fees received forfutUTe 5esSLons after the reporbng dateare included in creditors as deferred income. Provisions and ¢ondngencles Provisions are recognised when the charitable eompany has a present legal or constructive obligation as result of past events where it 15 probable that an outflow of resources will be required to settle the obligation and the amount can be estimated reliably. The amount recognised is the best estimate of the considerdtion required to settle the present obligation at the end of the reporting period. takitlg into account any risks and uncertainties surrounding the obligation. Where the consideration required to settle a Present obligation is confimed, the amount payable is transferred to creditors and any balance released to the ststement of fiDancial activities. Contingent Ilabilities. arising as a result of past events, are not recognised when (i) it is not probable that there will be an oufflow ofresources or that the arnountcannot be reliably measured at the reporting date or (li) when the existence will be confirrned by future events not within the charitablè eompany's control. Contingent liabilities are disclosed In the financial ststernents unless the probability of an outnow of resources is Immaterial. Fund accounting Unrestrirted fvnds comprise those rnonies which may be used towards rneetin8ihe eharitsble objectlves of the charity at the dlscretion of the Governors. Designated fund5 are unrestrirted fvnds earmarked by the Governors to be used for particular purposes in the fvture. Transfers are made to designated funds on the basi5 of approval by the Governors of future plans. Restrirted funds are grants or monie.s raised for a specific purpose or donations subject to donor imposed conditions. The prize endOwMent￿nd5 represent eitherpernianent capitsl funds where there is no power to convert the capital into incoTne and which must generally be held indefinitely or expendable funds where capital 7nay be used for the purposes of the fund. Page 32 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 ACCOUNTING POLICIES (CONTINUED) Taxatlon TheAssociated Board of the Royal Schools of Music isa registered charityand therefore is not liable to UK Income tax or ¢orporntion tsx on income derived from Its charitable activities a5 they fall wlthin the varfous exemptlons available to r¢8iStered tharities. ABRSM Is re815tered for VAT but 15 not able to recover the whole of Its input tax owlng to the partial exemption provislons. Expenditure includes input VAT to the extent it is Irre¢overJble. ABILSM'S artiviti¥S are carried out worldwAde and are subject to dirett and indirert tsx In different countiies. A provislon for ABRSM'S tsx Ilablllttes In relation to its RntsrnatioDal opemions has been included in note 22. The provision is reviewed and updated regularly based on professional tsx advlce re¢elved for each country. It Is assessed on a country-by-county basi4 calculatsd and classed as#provisionora contin8ent 1Sability perthe criteria in note 2(sl. Slgnlficant judgement ts needed to aetrrn￿ne thts provision as ABRSM'S bjternatlonal operdttons have been expanding and there Is uncertalnty around the risk of exposure to dirert and Indirert tax in each country. In addfitlorn the calculation of the potential tsx liability for each country usually Incorporates several elements, for example the type of Income, the period during which the tsx ts due. and the size of artyadditional interest or penalties due in that country. The wholly owned subsidiary. The Associated Board of the Royal Schools of Music tPubllshlng) tAmited, Is a commerdal entity and donate5 its pre.tsx profitto ABRSM under GiftAld rules. Contributlons to four of the Royal Schools of Muslc Contribution5 to four of the Royal Schools of MusSc (or thelr associated charitsble trnsts) #Te treated as distributions. the Royal Schools being members of the Charity. They are therefore charged to the statement of financial activities In the year In whlch theyare paid and shown as a movement in funds. GovÈrnment8rants Governmentgrants are accountsd for accordlngto the a¢cruaJ model. Pag8 33 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 EXAMINATION REVENUE 2024 £'ooo 2023 £'ooo Analysis by geographical market.. United Kingdom and Ireland Overseas 15.247 26.138 13,413 25,034 41,38S (287) 38.447 99 Foreign exchange (loss)1gain on oversea5 revenue 41,098 38,546 Total income Less.. examination fees received in advance (note 20) 44,137 (3,039) 41,348 [2.802) 41,098 38.546 Deferred fee Income: The movementwith respect to examination fee5 received in advance in the year is as follows.. 2024 £'ooo 2023 £'ooo Fees in advance as at l February 2023 less fees due for examinations taken in the year Fees received with respect to future examination periods (note 20) 2.802 (2.802) 3.069 [3,069) 3,039 2,802 3.039 2,802 TEACHER SUPPORT REVENUE 2024 £'ooo 2023 £'ooo Analysis by ¥eographlcal market.. United Kingdoni and Ireland Overseas io Total income 14 Page 34 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 5. INVEsfMENT INCOME Group Charfty 2024 £'ooo 2023 £'ooo 2024 rooo 2023 £'ooo Interest recelvable from: Unrestrirted fund5 Prize endowment funds 837 S8 164 54 172 54 58 218 859 226 6. INCOME OF TRADING SUBSIDIARY The Asso¢iated Board of the Royal Schools of Music owns the entire issued share capltal of The Assoclated Board of the Royal Schools of Music (Publishing) Limitsd a tradinB company incorporated in the UnSted Kingdomwith company number01910047. Thissubsidiaryundertakin8donate5 itstaxable profits toABRSM under GIftAid rules. The acdvities of the subsidiary undertaklng SUPPOrt the examination activitles of the parent company by provision of spedallst8rnded repertoire and othermaterials tsrgeted atspecific examlnation level& A summary of the results of the publishlngactlvltles for the year {excludlng intra-gmup Charges eliminatsd on con501idatton) is given below. Audited accounts of the subsldSary undertaktng wlll be filed with the Registrar of Companies. 2024 £'ooo 2023 £'ooo 6,829 (1.510) 6,746 [1,499) Costof sales Gross prI￿t S,319 5,247 Dlstributlon costs Administration and other operating charges Interest recelvable (888) {1.339) 89 (850) {1,361J 21 Net Income 3,181 3.057 The aggregate an￿￿nt of the subsidia￿5 a55et4 Uabllltles and funds a$ at 31 lanuary 2024, excluding Inrercompary balances,were as follows: 2024 rooo 2023 £'ooo Totsl netassets 3.339 3.259 Including intra-group charges and Intercompany balance5. the sub5Edlarfs results for the year were as follows,. turnover £6.833.000 [2023.. £6,750,000), net income £807.000 [2023: £605,000) and totsl net assets £20,000 (2023: £ZO,000). Page 35 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 ANALYSIS OF EXPENDITURE Dlrert Support Staff Charltsble Costs Costs {Note 8) {Note 13) £'ooo £'ooo Depreciatio Total 2024 Total 2023 Amortisatlon rooo rooo £'ooo £'ooo Charitable activilles: Examination5 Teaeher Support Scholarship payments Music education Publisliing 13.561 8,216 214 7,806 206 2.440 zi 32,023 441 1,379 Z,291 5,666 30.238 390 1,372 260 5,750 1.379 2,291 2,687 678 2,252 49 19,918 9.108 10,264 2.510 41,800 38,010 Pension finall￿ charge 109 109 169 Total 19,918 9.108 10,373 2.510 41.909 38,179 Unrestricted expenditure on Examinations and Teacher Support for the group before the defined benefit pension scheme adjustment was £34,755,000 and £442,000 respectively [2023.. £33.879,000 and £390,000)- The equivalent figures for the charity were E34,698.000 and £442,000 [2023.. £33,815,000 and £390,000). Included within total expenditure Is an adjustment to the defined benefit pension scheme of £2,750.000 (2023.. £3,644.000] which has been credited to the pension reserve (see note 31). £2,749,000 has been allocated to Examination5 expenditure and £l.000 to TeacherSupporL The prioryearcreditof £3,644.000 was allocated to Examinations. Also included in expenditure are prizes p3id from the endowment funds totalling £17,000 {2023.. £3.000). 8. SUPPORT cO￿s Support costs Including governance [5ee notes 7 and 11} are analysed as follows.. Examinations Teacher Support £'ooo Publishing Total 2024 £'ooo Tot21 2023 £'ooo £'ooo rooo Exam Support IT Sales and Marketing rinance acilities C50vernance (note 11) HR & other management 845 3.142 812 114) 1.860 147 1,424 424 3,084 921 83 2,013 180 1.234 87 21 226 134 3.455 967 (io) 2,054 147 1,6SO 23 171 83 143 8.216 214 678 9,108 7,939 Page 36 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 SCHOLARSHIPS 2024 £'ooo 2023 £'ooo United Klngdom students Overseas students 425 954 259 1,113 lJ79 1,372 The total numberof scholars supported durfng the year amounted to 91 (2023.. 119). 10. MUSIC EDUCATION- Ullre5tr1cted ￿ndS 2024 Eooo 2023 £'ooo DONATJONS Tn]stees of the Royal Academy of Music Trustees of the Royal College of Music Trustee5 of the Royal Northern College of Muslc EndowmentFund Trustees of the Royal Con5ervatolre of kotland Trnst 500 500 500 500 2,000 SPONSORSHIP The Benedetti Foundation Black Lives in Musi BLUME Haiti Commonwealth Resources Educatlon Afrlca Hamony Kenya Foundation Harmony Project Phoenlx HashtsgThe WRD Limited IndSa Natlonal Youth Orehestra The IvorsAcJdemy Kunbi's Music Company London Music Fund Music Edu¢ation Partnership Group Music Mastet3 Nationa[ Chlldren's Orchestra Natlonal Youth Choir National Youth Jazz Orchestra National Youth Orchestra Openup Music School Grounds Sounds Tanglin Trust School The Rondo Production Royal Philharn]onic Soclety Trl-BorouBh Music Hub The UK Asstsclation for Music Education- Music Mark Thrive MusicAcademyAfiica Ltd UnlvetEity ofStAndrews Venture Music Asia Others io 15 27 io 13 io 16 15 15 16 21 18 15 30 26 15 25 Is io io 24 21 3S 31 291 260 Pago 37 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 11. GOVERNANCE COSTS- Unrestrirted funds 2024 £'oo 2023 £'ooo 47 16 20 89 Audit Fees parent company Audit Fees Pension scheme Independent Pension Scheme Chairman Internal Audit Trustees and Officers Liability insurance Pension Fund Trustee Indemnity insurance 19 33 48 147 182 12. INCOME FOR THE YEAR 2024 £'ooo 2023 £'ooo Net income for the year is stated after charging/(crediting)'. Fees payable to the COrnpan￿S audltor and Its assoclates for the audit of the charltable company's annual accounts Fees payable to the compan￿5 auditor and Ats assoclates for other services.. Audit of subsidiary company Tax cornpliance Pension scheme audit completed by other audit firms Depreciation ofowned assets Depreciation of assets held under finance lease obligations Arnorti5ation oFintangible assets Operating lease rentals- leasehold buildings office equipment Dilapidations provision Exchange10ssI(gain) on overseas revenue 47 23 394 37 Z,079 1,123 13 17 287 16 336 75 3.123 1.171 167 16 [99) Page 38 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 13. sfAFF cosrs 2024 rooo 2023 £'ooo Staff costs duringthe yearincluded: Wages and s#larie5 Sodal securlty costs Employer penslon costs Defined Benefit Pension adjustment [see note 31) Pension finance charge Other staff costs &336 859 3,293 (2,750) 109 526 7,762 825 4.084 [3,644) 169 474 10,373 9.670 The number of employeeswho earned £60,000 or more (including benefits) during the yearwere as follows: 2024 No. 2023 No. £ 60.001 . £ 70.000 £ 70,001 - £ 80,000 £ 80,001 - £ 90,000 £ 90,001 . £100.000 £ioo,ooi- £iio,000 £110.001- £120.000 £120,001- £130,000 £130.001- £140,000 £140,001- £150,000 £150,001- £160,000 £190,001. £200,000 £210,001- £220,000 Duringthe year £6,752 (2023- £3,200) was paid in redundanry and pay in Ileu of notice. These payments are included in the tsbles above and have been recogni5ed in ffijll in the ststement of financial activities. Page 39 THE ASSOCIATED BOARD OF THE ROYAL SCHOOIS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 13. STAFF COSTS [con¢5nued) The number of employees who earned £60,000 or rnore during the year to whotn retirement benefits are accruing under pension schemes funded by the company are'.- 2024 No 2023 No. Defined contribution scheme 25 20 The company rnade pension contributions of £178,547 [20Z3: £133,416) in respect of employees noted above. The defined benefit scheme closed to future accrual on 31 December 2018 and active ￿eMberS elected to transfer to the defined conttibution pension scheme from I january 2019. The average number ofemployees, excluding temporary staff. during the year was as follows.. 2024 No. 2023 No. Charity UK trading subsidiary 177 14 168 14 191 182 The key management personnel of the charity and its wholly owned subsidiary received total employee benefits of £1,111,147 (2023: £883.333). The key management personnel are Lonsidered to be the individuals noted on page 2. No Governor received payrnent fr>r their services in the year (2023.. £nil). Total travelling and subsistence expenses reimbursed by ABRSM to Governors and Alternates in the year, for expenditure necessarily incurred on ABRSM'S business, were £708 {2023.. £nil)- No othei. Governor. nor any person connerted with any Governor, received any remuneration in the year ended 31 january 2024 (2023.. £nil). Page 40 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 14. TANGIBLE FIXED ASSErs Short Furnlture, leasehold Ilxtures land and Computer and bulld1rt￿ equlpment equlpn)ent £'ooo rooo £'ooo Totsl £'ooo Group and Charlty At l February 2023 Additions Disposals Transfers 2,352 837 853 4.042 li (58) (58) At 31 lanuary 2024 2,358 784 853 3,995 Depredadon At l February 2023 Charge for the year On di5PQ5als .1,231 208 594 151 (58) 540 74 2.365 433 [58) At31 lanuary2024 1,439 687 614 2,740 Net book values At 31 lanuary 2024 919 97 239 1.255 At 31 lanuary 2023 1.121 243 313 1,677 All assets are used for charitsble purpose& The net bookvalue of assets held under finance lease5 is £nil [2023: £37,000). Paga 41 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 15. INTANGIBLE FIXED ASS Assets under constructlon £'ooo Software development £'ooo Total £'ooo Group #nd Cbartty Cost At l February 2023 Additions Disposals Transfers 147 1,994 {13) (753) 10,917 81 11.064 2,075 (13) 753 At 31 january 2024 1,375 11.751 13.126 Amortisatlon At l February 2023 Charge forthe year 7,698 2.079 7,698 2.079 At 31 january 2024 9,777 9.777 Net book values At 31 January 2024 1.375 1.974 3.349 At 31 January 2023 147 3,219 3,366 All assets are used for charitable purposes. The transfer from assets under construction to software development mainly relates to expenditure on roadmaps, digital cerbficate5. and Music Medals. Roadmaps relate to continuous development on the CRM, in order to help with income recognition. Digital certificate5 have been rolled outduringthe year. andoffer customersdigitsl cerknficate5 ratherthan physical copies. A new syllabus ofmusic Medals was developed, alongSL'de the recording of these transartions on the CRM. Thi.$ wa5 also completed duringthe year. Page 42 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY2024 16. FIXED Ass￿ INVESTMENTS Prlze endowment funds £'ooo Sub51dlary undertaklngs £'ooo 20Z4 Tot•J ¢000 2023 Total £'ooo Group Prize endowment funds-listsd investh)ents at marketvalue At l Febn￿ry 2023 Addition5 Unrealised Oossjlgaln In the year 1,574 loo (8) 1,574 100 (8) 1,578 [4) At 31 january 2024 1,666 1ffj66 1,574 Ize endowment funds- Ilsted Investments at marketvalue las above) Investment Sn subs5dSary Ordinary shares of £1 each at cost Unsecured loan note 1.666 1,666 1,574 io 772 io 772 io 772 782 1,666 2.448 2,356 The prize endowment funds are Snvested In Blackrock Charities UK Bond and Equlty Common Investment Funds with a cost of £879.000 {2023.. £779,000). The charlws subsidiary undertaklng Is The Assodatsd Board of the Royal Schools of Mmslc (Publishing] mitsd. The charlty owns 100% ofthe compan￿5 15sued ordlnary £1 share& The prlncipal acdvlty ofthe company is the produrtion and sale of musSc publlcations and recordings. The charity has glven an undertamngto its subsidiary not to demand repaymentof the unsecured loannote before I luly 2025. Interest 15 chargeable on the unsecured loan note at a rats of 2% over the Bank of England base rate from time to ttme. No provision 15 considered necessary againstthe £10,000 cost of the investment in thSs subsldSary. Poge 43 THE ASSOCL4TED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 17. STOCKS Group Z024 £'ooo Group 2023 £'ooo Printed music and recordings Paper 616 88 696 135 704 831 18. DEBTOKS Group Charlty 2024 rooo 2023 £'ooo 2024 £'ooo 2023 £'ooo Trade debtors Oversea5 representatlves Amounts due from subsidiary Other debtors Prepayrnents and accrued income 1,149 522 1.487 1,030 655 522 2.546 160 1.438 875 1,030 2,467 184 993 570 1.483 614 1.033 3.724 4,164 5.321 5,549 19. CURRENT ASSET INVESTMENTS Group Charlty 2024 rooo 2023 £'ooo 2024 rooo 2023 eooo Cash held un deposit greater than 3 months less than 3 months 16,750 5,550 7,000 6,050 15.000 5.550 6,000 6,050 Included within the above figure are treasury deposits with an original maturlty of 12 months or less. At the balance sheet date the average maturity of these deposlLs was 7 months for the group [2023: 7 monthsj atld 7 months for the charity (2023.. 7 tnonths). The average interest rate was 5.IIOA) [2023.. 3.69%] for the group aDd 5.011%12023., 3.600hJ for the charity. Page 44 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLJDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 20. CREDITORS.. amounts falllngdue within one year Group Cbartty 2024 rooo 2023 £000 2024 £'ooo 2023 £000 Trade credltors Overseas representatlves Re￿ndS due to ¢usiomer5 Defe￿d Income.. exam fees (note 3) Other taxes and social securlty costs Finan￿ lease arrangements Other creditors Accruals and otherdeferred Income 1.447 Z,S61 27 3.039 426 1,729 1,639 167 2B02 340 33 618 2.416 1,265 2.561 27 3.039 396 1.490 1,639 167 2,802 310 33 280 2,410 656 2,142 326 2,126 10,298 9,744 9.640 9,131 21. cRED￿oRS. arnounts fa]Ilngdue after more than oneyear Group 2024 Eooo Charlty 2023 £'ooo 2024 rooo 2023 eooo Other credltors 561 544 561 544 561 544 561 544 FRS 102 requlres the full amount of a dllapldatlon prov5slon to be re¢ognised when the obligation artses. Other creditors represent the estimated infiation indexed dllapldatlons fund potentlally payable on exSt from the lease of our CUTrent premlses, Salterl Hall. 22. PROVISIONS Group rooo Chthty Tax provlslon at l February 2023 Total increased Total settled 1.643 1.070 (576) 1,643 1,070 [576) Tax provision at 31 January 2024 2.137 2.137 ABRSM continued to seek advice on Its taxation wsition in relation to Its international operation5 and expects thatmostresulting liabilities will be settled overthe courseof the nextfive yearswith the timescale being part]y dependent on the speed of response of the relevanttsxauthorities. Page 45 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY20Z4 23. ENDOWMENTFUNDS Movement In Funds Income and Expendltyre ins and losses Atl February 2023 £'ooo At31 january 2024 £'ooo £'ooo rooo Group #nd cbarlty Permanent prize endowment funds Sheila Mossman Prize account Ralph Bassett Prtze account Constance Haddon Prize account Winifred Liversidge Prize account Irene ta55en Bequest Welnman/Duraisamy Prize Sundry named prizes and general prizes account 156 121 137 140 512 [2] (i) [1) (i) [2) 160 124 141 144 527 17 320 li (14) 317 1,391 (21) 1.418 Expendable prixe endowment funds Gordon Bryan Fund Alan Pickard Prize Taylor White Gibbs Prize iii 28 161 (i) (2) (i) 114 27 165 300 io 14) 306 Total endowment funds 1.691 58 {25) 1.724 Interest receivable Expenditure on prizes Unrealised loss on investments 58 [171 [25) Income and gains 2023 £'ooo Expendlture and losses 2023 £'ooo Interest recelvable and SLindry income Expenditure on prizes Unrealised loss on investments 54 13) 14} 17) The endowment funds were esfablished to prov5de prizes for musical achievements In ABRSM'S examinations. For permanent prize endowment funds, unexpended income is accumulated as capital and added to the fund each year. Expendable prize endowment fvnds comprise unexpended balan￿S of donations held on trnst to be applied for specific purposes. Page 46 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY2024 24. UNRESTRICTED FUNDS Atl February 2023 £'ooo llxpendltsre TrADslers At31 lanuary 2024 £'ooo rooo rooo rooo Group 5,043 (439) 4ffj04 De$lgDatedfvnds Development funds Examlnerfund 3,750 780 (1,880) 1,500 250 3.370 1.030 Gener￿ ch8rftable funds 9,702 48.832 (42.653) [1,311) 14.570 Total 19,275 4B,832 [44.533) 23,574 Cborlty Flxed assetfvnd 5,043 (439) 4,604 Deslgn•ted funds Developmentfunds Examlner futld 3,750 780 (1,880) 1,500 250 3,370 1.030 General ¢h8rttabJe funds 9,692 43.110 [36,930) (1,311) 14.561 Total 19.265 43,110 [38,810] Z3.565 Designatsd fijnds represent development fiJnd5 set aside for the development of ABRSM'S digitsl Infrastrucbjre and development of overseas markets, and furtds relating to examinercosts. Aftertheyearend butbeforethe dats ofappToval ofthese accounts, distributions of £lm Intotsl were made to members. Page 47 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEARENDED 31 IANUARY 2024 25. ANALYSIS OF NET ASS￿5 BETWEEN FUNDS Fund balances as at 31 lanuary 2024 are represented by.. Unrestrirted Funds (including Penslon Reserve) E'OOO Prlze EDdowment Funds £'ooo Total Z024 £'ooo Group Tangible r￿ed assets Intangible tlxed assets Investsnents Current assets Current liabilities Non-current liabilities Provisions 1.255 3,349 1.255 3,349 1,666 32,024 (10.298) {561) (2.137) 1,666 89 [31) 31,935 [10,267) 1561) (2.137) Net assets before pension deflclt Pension deficit 23,574 (1,796} 1,724 25.298 (1.796) Totsl net assets after pension deficit & provisions 21,778 1.724 23,S02 Chartty Tangible fixed assets Intangible fixed assets Investments Currentassets Current liabilities Non-current liabilitie5 Provisions 1,255 3,349 782 30,486 [9,609) (561) [2,137) 1.255 3.349 2.448 30,S7S {9,640) (561) {2,137) 1,666 89 (31] Netassets before pension deticit & prowsions Pension deficit 23.565 1.724 25.289 (1,796) (1.796) Totsl net assets after pension deficit & provisions 21,769 1.724 23.493 Group and Charity Unrealised gains included above on investmentassets Isee nute below) 787 787 Unrealised gahns as at i flebruary 2023 Net (loss) arising trom reYaluation5 in the year 795 795 (8) (8) Unreali5ed gains as at 31 Iznuary 2024 787 787 Page 48 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 26. RECONCILIATION OF NEf INCOME TO NET CASH FLOW FROM OPERATING ACTivmES 2023 2024 rooo £'ooo Net income for the reportingperiod.. Depreciation charge Amortisation ¢harge Loss on disposal of fixed assets Interest received Loss/(gain) on Invesunents Decrease in stocks (Increase]/decrease In debtors (Decrease)/increase In credltors Increase in provision5 Net cash movement In pension deficit 973 433 2.079 13 (895) 7,346 416 3,123 [218) 127 (444) (435) 221 [3,475) 604 494 (2.641) Net Infiow provlded by operatln8actlvldes 7AJ35 6,547 27. ANALYSIS OF CHANGES IN DEBT At l F¢brt￿ry 2023 £'ooo Cash flows At 31 lanuary 20Z4 £'ooo £'ooo Casb and cash equlvalents Cash Cash equivalents 8,235 6,050 [2,939) [500) S296 S,550 14,285 (3.439) 10.846 Borrowlngs Finance lease {33) 33 (33) 33 TOTAL 14.252 (3,406) 10.846 28. FINANCIAL COMMITMENTS Scholarshlps Scholarships awarded for whlch no provl$iort has been made in these accounts are experted to become payable as follows:. 2024 £'ooo 2023 £'ooo Year ending 31 January 2024 Year ending 31 January2025 Year ending 31 January 2026 Ye8r ending 31 January 2027 Year ending 31 January 2028 1.230 832 369 193 1,231 350 200 2.S69 2,624 All scholarships offered bythe balance sheetdate forthe eurrentacddernicyearare provided in ￿11. Awards for future years are subSectto review and authorisation by AB￿m each year and are therefore notincluded in provlsitsns as atthe balance sheet dats. Page 49 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY2024 Z8. FINANCIAL COMMITMENTS (contlnued) Other Financial Commltments At 31 lanuary 2024 the group and charity had future total minirnum operating lease payments as follows.. Land and bulldlngs 2024 rooo Other 2024 £'ooo 2023 £'ooo 2023 £'ooo One year Two to five years Over five year5 1.207 4,169 1.207 4,827 549 io 24 li 34 5.376 6,583 34 45 The total future minimum finance lease payments as the end of the reporting period are as follows.. Group 2024 £'ooo Charlty 2023 £'ooo 2D24 £'ooo 2023 £'ooo Notlater than one year tAter than one yearand not later than fiveyear5 33 33 33 33 Z9. TBANSACTIONS WITH RELATED PARTIES ABRSM made contributions of £500.000 (2023: £nil) to each of four Royal Schoo15 of Music or thelr charitable trusts. Two representatives from each of these organisations sit on the Governing Body. ABRSM was party to a number ot rinancial transactions with its tradin8 subsidiary, ABRSM Publishing during the year as follows.. 2024 £'ooo 2023 £'ooo Charged by ABRSM to ABRSM PublishlDW. AdMiniSt￿tive expenses recharged Pension costs recharged Loan interest Management charge Copyright charge 18 565 29 2.108 319 391 53 118 336 Charged by ABRSM Publlshing to ABRSM.. Paper stock recharged Printed niusic and recordings Glft ald donation from ABRSM Publisbingto ABR5M: 606 Balance at the year end: Due to ABRSM from ABRSM Publishing Due from ABRSM to ABRSM Publishing Z,546 2,467 During the year Profession Colin Lawson wa5 due £0 [2023.. £3) in royaltiesbyABRSM {Publishing) Limited on normal commercial ternis. The balance outstanding at the year end was £0 [2023.. £8)- Page 50 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 29. TRANSAcfioNS WITH RELATED PARTIES (contlnued} ABRSM provided examination services to related parttes on nornjal commerclal ternis as follows.. 2024 £'ooo 2023 £'ooo Charged byABRSM Royal College of Music Royal Academy of Music Royal Northern College of Music Royal Conservatoire of Scotland li 16 13 Balance attheyear end: Royal College of Music Royal Academy of Musi Royal Northern College of Muslc Royal Conservatt)iTe of Scot]and There have been no other related patytransartlons durlng theyear. 30. FINANCIAL INsfRUMENTS ABRSM has the followlngfinancial as5etswhich are Included atfairvalue through the statementof financial artivities.. 2024 £'ODO 2023 £OOD Flnandal assets at fair Yalue through the statement of flnandal artivities.. Investments 1,666 1,574 Page 51 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 31. PENSION SCHEMES The charity operatsstwo penslon schemes.. a group stskeholder pension planand a defined benefitscherne. From l February 2014. qualifyingstaffjoining ABRSM are auto enrolled into the group stakeholderpension plan provided by Scottish Fquitable plc under the brand name Aegon (Financial Services Regrister number 165548). Coniributions are recognised in the Statement of Financial Actiwties In the year in which they are earned. The rninirnum employee contribution is 3% of basic salary. ABRSM contributes 5% of basic salary. Each percentage increase in the employee contrfjbution is matched by ABRSM up to a maximum employer contribution of 10%. The defined benefit scheme was established to provide retirement benefits for the chariws èmployees based upon final pensionable salaries for those Joining before 6 April 2006 or career average salaries for those joining from 6 April 2006. On l April 2013 all metnbers of the final salary sertion of the 5cheTne transferred to the career average section of the scheme. The assets of the scheme are held separately from those of the charity. The scheme closed on 31 December 2018 to future accrual. Active members had the option to poin the organisation'5 group 5takehold¢r pension scheme at I laftuary 2019. Contributions payable are deterniined on the basisof triennial valuations carried out bya qualified artuary. The charlty's contributions are charged as resources and expended in the year In which contributions are made. The charity ceased contributions for the accrual of future benefits from I January 2019. The pension service costs for the year were £nil (2023.. £nll). The present value of the scheme liabilities includes E795,000 (2023: £761,000). carrled fonvard from the prioryears asan estimate of the past service cost of GMP equalisatlon. These accounts reflect the requirements of FRS 102. The econornie assumptions listed below have been calculated by a qualified independent aCDJary. They are based on market conditions as at 31 lanuary 2024 but have been derived using the methodology set out in FRS 102. Page 52 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 31. PENSION SCHEMFS (eontlDued) The discountrate has been derfved usin88 corporate bond yield curyeapproach as requlred by FRS 102, The iBoxxover 15 yearcorporateAA rated bond index had a yield of 4.82% perannum as at 31 january 2024. This index has a duration of around 14.8 years. which Is less than the duration of the Scheme's Ilabllltle& The discount rate ha5 been increased by 0.2%, whlch 15 slmllar to the Increase in gilt Spot yleld5 at IS and 20 years. duratio￿ resultlng in a discount rate of5.0% per annum (to I decimal place)- Retsil prtce inflation (RPI) has been derived fromthe spot Infiation rates published bythe Bank of Eng]and. At duratlon of 20 year5. the spot rate for inflation Is 3.34% per annum as at 31 lanuary 2024. An RPI increase assumption of 3.3% has been used (to I decimal place). Inthe prioryearitwasa55umedthat Consumerprlce inflation [CPI) would be 0.6% ayearlower than RPI. However, it is expected thatthe RPI will be calculated in the same wayas CPI-H from 2030, so the dÉfferenre between the two indices should reduce considerably. Nonethele55, until 2030 the two indices will be calculated differently and it should be noted that a slgnlflcant proportion of the deferred pensioner liabllltles will retire before the indi￿S are aligned. It is proposed that the assumption of the difference between RPI and CPI remalns at 0.6q6. This results in a CPI increase assumption of 2.7%. No estimated salary increases due to the scheme closure at 31 December 2018. Increases to penslons In payment wh5ch are related to price Inflation have been taken to increase In Ilne with the RPI assumption or the annual Increase op. whichever 5s lower. InLTrases to deferred penslons whlch are related to price inflation have been tsken to Increase in Ilne wlth the CPI a55urnption, orthe cap, whicheverls the lower. Commutation of penslon by members estim*ed at 25%, allowing for an Increase in commutation rates since the actuarial valuatlon. It 55 a150 assumed that comrnutation factors will be increased by 20% and this is reflerted in the FRS 102 IlabllltSes. The prlnrlpal art￿arIal assumptlons used perannum are: 2024 2023 Dlscount Rats S.096 4.5% Retall prlce Inflatlon 3.3% 3.5% Consumer price inflation 2.7116 Increasesto pensionable earnings ll/a n/a Increasesto pensions in payment Earned up to 31 December 2001 Earned from Ilanuary 2002 to S AprAI 2005 Earned from 6April 2005 5.0% 3.3% Z.5% 5.0% 3.5% 2.5% Pre-retlrementlncrease5 fordeferred pensions Earned before 6 lune 2009 Earned from 6 lune 2009 2.7% 2.S% 2.9% 2.5% Page 53 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 31. PENSION SCHEMES (contlnued) Reconciliation of funded status to balanee sheet 2024 £000 (42.141) 40.345 2023 £'ooo (46,343) 42,545 Presentvalue of liabilitie5 Fair value of plan assets Deftcit 1.796 13,798) Assets Z024 rooo Welght 2023 £'ooo Weight Equities Bonds Cash {includlng dividends receivable) 11,835 27,384 1,126 29.3 67.9 20,820 20.842 883 48.9 49.0 Total marketvalue of assets 40.345 ioo.o 42.545 ioo.o The amounts recognlsed in the Ststement ofFlnandal Activities are as follows: 2024 tooo 2023 £'ooo Interestexpense Interest tncorne 2.051 (1.942) 1.527 (1.358) Pension Finance charge 109 169 Employerfs defidt contributions (2.750) (3.644} Defined Benefit PensionAdjustment (2.750) [3,644) Changes in the present value ofthe Defined Betteflt Obllgatlon (DBO) during the year are as follows: Yearending 31 January.. ZOZ4 £'ooo 2023 £'ooo Present value of the Ilabilities as attlie stsrt of year Current setmce cost Contributions by the members Interest expense Past seryice c05t Re-rneasurement- effect of experience adjustments loss/tgain) Re-measurement- effect of changes in assumptions tgain]11055 Benefits paid 46.343 67.033 2.051 1,527 2,070 [23.0041 11,283) (5.621) {1.519J Presentvalue of the liabilities as at the end of year 42.141 46,343 Page 54 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY2024 31. PENSION SCHEMES (contlnued) Changes In the falrvalue ofas5ets durlng the yegrare as follows: Yearended 31 January: 2024 EOOO 2023 £'ooo Fairvalue of planassets as at start of year Interestirtcome Re-measurement- return on plan a55ets excluding intsrestlncome Employerfs norn￿] contrlbutlons Employerf5 deficlt contributlons Contributlons by the members Benefits paid 42.S45 1,942 {5.373) 57,867 1.358 [19,041) 2,750 3.644 (1,519) (1,283) Fairlfdlue of plan assets as at end of year 40,345 42,545 Actual return on plan a55ets (loss)Igaln (3.431) (17,683) Based on current pensionable earnings and the deficSt recovery plan agreed In 2022, the ernployews deflclt recovery contrlbutions expetted to be paid to the Scheme for the year ending 31 January 2025 amounts to £2.750.000 [2024: £2,750,000}. Ajnounts for the eurrentaDd prevlous fourpertods are as follows: As at 31 January.. 2024 £'ooo 2023 £'ooo 2022 £'ooo 2021 £'ooo 2020 £'ooo Pre5entvalue of the Ilab115tles Fairvalue of plan assets (42.141) 40.345 (46.343) 42,545 (67,033) 57067 (75,661) 49,242 (69,209) 43,090 Defldt (1,796) (3,798) (9,166) (26.419) (26,119) Re-measurement- Effertof experience adlustsnent on scheme liabilitie5 Ooss)Igain (887) (2,070) 739 42 (1,192) Re-mea5urement- Effect of change in assumption on scheme liabÈlities gain/Ooss) 5.621 23.004 [7,947J [6,181) 9.073 Re-measurement- Re￿rn on plan assets excluding intsrest income Ooss]18aln (5.373) {19,041) (594) 2,835 3,821 FRS 102 adlustment (639) 1,893 8.092 (3,304) (6,444) Volatlllty ofFRS 102 The results disclosed above are Inherently volatile. Thls Is because the liabillties have been calculatsd by dtscounting the benefits using the yield on a suitable AA-rntsd corporate bond, whereas the scheme does not invest solely in high qualitycorporate bonds. To thatextentthere is, for FRS 102 purposes, a'mtsmat¢h' bettveen the assets and liabilities, which rneaD5 that the assets and liabilities (and hence the surplus or deficit) can be volatile between dlfferent accounting periods depending on general movements in the market Pago 55 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 32. CHARITY STATEMENT OF FINANCIAL ACTIVITY UDrestrlcted Funds Penslon Reserve (note 31) £'ooo Restrlcted & Endowment Funds Total Funds 2024 E'ooo Totsl Funds 2023 £'ooo rooo Notes INCOME & ENDOWMENTS FROM: Charllable aftivltles.. Examinatyotls Teacher Support Other trading a¢dvltle CovenaDi Irom subsidlary Copyrlght fee5 Investments Other 41,098 14 41.098 14 38,546 807 336 801 54 606 319 226 16 336 859 54 58 Totsl Income 43,110 58 43.168 39,716 EXPENDITURE ON: Charltable Arlivities Exatninations Teacher Support Scholarships Musl¢ edu(3tlon 34.698 442 1,379 2,291 IZ,7491 17 31.966 441 1,379 Z.291 30,174 390 1372 260 io 38,810 (2.750) 17 36.077 32.196 Pension flnance chaTge 109 109 169 TO￿ expethdiiiire 3B,810 (2.6411 17 36,186 32,365 Net110ssl/gain irLve5bnent 16 181 (8) 14) Net Infomel(expensel 4,300 2,641 33 6.974 7.347 Other rec•gnlsed galns., Artuarl218aln on pensiotl scheTne 31 (639) (639) 1,893 Total ¢omprehenslve Income 4,300 2,002 33 6J35 9,240 RECONCILIATION OF FUNDS: Balance brought foThvard Total comprehensive income 19,265 4,300 13,79BI 2,002 1,691 33 17.158 6,335 7,918 9,240 Balance carried forward 23,56S 11,7961 1.724 23,493 17,158 Page 56 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 33. COMPARATIVE GROUP sfATEMEprf OF FINANCIALAcfiviTY FOR YEAR ENDED 31 IANUARY 2023 Unrestrlcted Funds eooo P•nsIon Restrlcted & Reserve Endowment Funds £'ooo Funds 2023 eooo rooo INCOME & ENDOWMENTS FROM: Charltsble a¢dvttles Examlnaljons Teacher Support Other tradlngacdvldes: Publi5hinB sales Invesnllents Other 38,546 38.546 746 164 16 746 218 16 54 Tots] kncome 45,475 54 45.529 PENDITURE ON: ChaTltsble Artlvltles ExamlnadotLS Teacher Support Scholarshlps Music education Otber tradlngactlvide Publlshlng 33A79 390 1372 260 {3,644) 3033B 3911 L372 260 5.750 5.750 41,651 [3.644) 38.010 Pertslon flnance charye 169 169 Totsi expeDdltUTe 4J,651 13,475) 38.179 Net Oossllgaln on Investment (41 Net InoJmel(expeDdliure) 3M24 3,475 47 7J46 Other recognlsed galnslO05ses): AcbJarJalgaln on pensjon scheme 1,893 Tolal comprebeDslvelncome 3.824 5,368 47 9339 RECONCILIATION OF FUNDS: Balance brought lorward Nermovementln funds 15,451 3,824 19.1661 5.368 1.644 47 7,929 9.239 Balance carrled forward 19,275 13.7981 1,691 17.168 Pa98 57 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED AccouKfs (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 34. COMPARATIVE GROUP ANALYSIS OF EXPENDITURE FOR YEAR ENDED 31 IANUARY 20Z3 Direct Charltable E'ooo Support Costs rooo Staff Costs Depreciation & amortlsatlon E'ooo Total 2023 £'ooo £'ooo Charltable activities: Examinations Teacher Support Scholarship payrnents Music education Publishing 12,921 6.908 141 6,956 222 3,453 27 30238 390 1.372 Z60 5.750 1,372 260 2,482 890 2,323 55 17,035 7.939 9,501 3.535 38.010 Penslon finance charge 169 169 Total 17,035 7,939 9,670 3,535 38,179 35. COMPARATIVE GROUP ANALYSIS OF SUPPORT COSTS FOR YEAR ENDED 31 IANUARY 2023 Examlnations Restated £'ooo Teacher Support £'ooo Publlshlng Total 2023 £'ooo £'ooo Exam Support IT Sale5 and Marketing Finance Facilities Governance HR & rther management 424 2,539 779 72 1,832 176 1.086 424 3,084 921 83 2.013 180 1234 116 429 137 li 161 20 148 6,908 141 890 7.939 Page 58 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 3& COMPARATIVE MOVEMENT OF ENDOWMENT FUNDS FOR YEARENDED 31 IANUARY 2023 Atl February 2022 rooo Income and Expelldlture At31 gaiDS alld1055es lanuary 2023 eooo £'ooo £'ooo Group and dmrlty Pernanent prjze eDdowmentfunds Shella Mossman Prize account Ralph Bassett PrSze a¢￿Unt Constance Haddon Prize account Winifred Llversidge Prize account ITene lassen Bequest Welnman/Duraisamy Prlze Sundry named prlzes and general prizes account 151 118 133 136 497 156 121 137 140 512 (i) [1) (i) 16 310 li (i) 320 1,350 45 (4) 1,391 Expendable prlze endowment funds Gordon Bryan Fund Alan Pi¢kard Prize Taylor Whlte Glbbs Prize 108 27 159 iii 28 161 (3) 294 [3) 300 Total elldowment funds 1.644 54 (7) 1,691 Interest recelvable Expenditure on prizes Unrealised loss on Investments 54 (3J 54 (7) Page 59 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 IANUARY 2024 37. COMPARATIVE MOVEMENT OF uNREsTRl￿ED FUNDS FOR YEAR ENDED 31 IANUARY 2023 Transfers At31 january 2023 Atl FebTuary 2022 £'ooo Income Expenditure rooo £'ooo rooo £'ooo Group Flxed asset fund 6.243 (1,200) 5.043 Des18nated (unds DevelopTnent funds Exatlllner fund 3,946 530 (1.696) 1.500 250 3.750 780 General charltable nds 4,732 45,475 {39.955J [550) 9.702 rotal 15,451 45.475 (41,651) 19,275 Charlty Flxed asset fund 6,243 (1.200) 5.043 Deslgnated funds Development lunds Examiner fund 3,946 530 (1,696) 1.500 250 3.750 780 General fharltable nds 4,721 39.662 (34.141) [550) 9,692 Tot31 15,MO 39,662 (35.837) 19,265 Page 60 THE ASSOCIATED BOARD OF THE ROYAL SCHOOLS OF MUSIC NOTES TO THE CONSOLIDATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 JANUARY 2024 3& COMPARATIVE ANALYSIS OF N￿AsSETs BETWEEN FUNDS FOR YVIR ENDED 31 IANUARY 2023 Unrestrl¢ted Fullds {Includlng Pensloll Reserye) £'ooo Total 2023 End¢)wmellt Funds £'ooo Group £'ooo Tangible fixed assets Intangible ftxed a55ets Investments Current assets Current liabilitSes Non-current liabillties Provisions 1,677 3.366 1.677 3,366 1.574 26,280 (9,744) ($44) (1,643) 1,574 135 (18) 26,145 [9,726) [5441 [1,643) Net assets before penslon deficit Pension deficlt 19,275 (3.798) 1,691 20,966 (3.798) Totsl netassets after pension deficit & provisions 15.477 1,691 17,168 Charfty TanBible fixed assets Intangible fixed assets Investments Current assets Current liabSlltSes Non-current liablllttes Provisions 1,677 3,366 782 24,740 [9,113) {544) (1.643] 1,677 3,366 2,356 24.875 (9,131) (544) (1,643) 1.574 135 (18) Net assets before pension defiat & provlslons Penslon defi¢it 19,265 1,691 20,956 (3,798) [3,798) Total net assets after penslon deficit& provlsion5 15,467 1,691 17,158 Group and Chartty Unrealised galns Included above on investment assets (see nots below) 795 795 Unreallsed gains as at l February 2022 Netgaln/{105s) arfslng from revaluations In the year 799 799 (4) (4) Unrealised8ains as at 31 January 2023 795 795 Page 61