The Trustees, who are also directors of the charitable company for the purposes of the Companies Act 2006, present their annual report with the financial statements of the charitable company f or the year ended 30 November 2018.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's Memorandum and Articles of Association , the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (as amended for accounting periods commencing from 1 January 2016) .
The charity's objects and the principal activity of the company is to support such charitable objectives o f The Old Vic Theatre Trust 2000 as the trustees from time to time think fit, in particular by:
(1) T he promotion, maintenance, improvement and advancement of education by the encouragement of the arts, including the arts of drama, mime, dance, music, ballet, opera, puppetry, painting and sculpture, photography, cinema, literature and poetry and to formulate, prepare and establish schemes therefore, and by:
(2) T he advancement of English heritage for the public benefit, by the encouragement and stimulation of the public's understanding and appreciation of the architectural and cultural heritage of T he Old Vic Theatre.
It is the policy of the charity to make grants in support of The Old Vic Theatre Trust 2000 (Registered charity number 1072590). Such grants will be made up to the level of net income before investment returns.
During the year the charity continued to make further investments to generate returns and enable grants to be paid in furtherance of its objects to The Old Vic Theatre Trust.
In the year under review this totalled £ 202,162 of grants. £168,000 was granted towards building capital projects to improve accessibility and front of house facilities; £12,000 was granted towards the production, A Monster Calls ; £10,000 went towards fundraising for the Capital Campaign, and the balance of £12,162 granted was redirected back to pay the running costs of the charity.
The final net expense for the year was £ 64,768 (201 7 - £ 568,948 net income ) which included a reduction in the market value of the managed fund of £ 84,434 (201 7 - £ 495,023 gain ) – note 10.
Total income amounted to £ 224,643 (201 7 - £ 276,000 ) – notes 2 & 3. There was a decrease in income from donations of £ 79,320 to £ 20,000 largely as a result of more focus made on fundraising for the Capital Campaign during the prior year. There was an increase in investment income of £7,963 to the sum of £204,643 due to the increase in investment portfolio units held.
Reserves policy
It is the policy of the charity that free reserves (comprising unrestricted net current assets) should be maintained at a level to give the charity financial flexibility and a buffer against operational risks. As a managed fund however these operational risks are minimal but the fund is structured so that there is always a cash portion held in reserve. The level of net current assets as at 30 November 2018 was £69,167 (2017 - £52,001).
Investment policy and objectives
Under the Memorandum and Articles of Association, the charity has the power to make any investment, which the T rustees see fit.
Investment performance
The charity's investment portfolio is managed by Sarasin and Partners LLP. During the year this managed fund generated net income of £211,873 (2017 - £201,288) including interest, investment income and gains on disposal of investment assets and management fees. At the year end, the market value of the managed fund was £6,136,977 (2017 - £6,218,911). See note 11 for the movements in the year.
The Trustees are satisfied with the performance of the charity's investments portfolio which was represented by an overall decline in holdings of 1.32% year on year and compares to an overall decline of 5.22% in the FTSE All Share Index in the same period.
Risk management
The trustees have a risk management strategy which comprises:
An annual review of the risks the charity may face;
The establishment of systems and procedures to mitigate those risks identified in the plan; and
The implementation of procedures designed to minimise any potential impact on the charity should those risk s materialise.
The charity’s focus over the next couple of years is to continue to generate funds and provide grants towards The Old Vic building project to improve accessibility.
Governing document
The Old Vic Endowment Trust is a company limited by guarantee and is a registered charity, governed by its Memorandum and Articles of Association.
Trustees
T he Trustees who served during the year and up to the date of signature of the financial statements were were:
Appointment of T rustees
The board of T rustees has the power to appoint additional trustees as it considers fit .
Or ganisational structure
The charity is governed by a board of T rustees of up to 5 members. The T rustees meet regularly to manage its affairs. The day-to-day operations of the charity are managed by a management team appointed by the trustees and reporting to the board.
New trustees undergo an orientation period to brief them on their legal obligations under charity and company law, the content of the Memorandum and Articles of Association, the committee and decision making processes, the business plan and recent financial performance of the charity. During the induction period they meet key employees and other trustees. Trustees are encouraged to attend appropriate external events where these will facilitate the undertaking of their role.
Relationship with related parties
The charity has a close relationship with The Old Vic Theatre Trust 2000. There are no other related parties other than the trustees.
The Trustees' r eport was approved by the Board of Trustees.
The Trustees, who are also the directors of The Old Vic Endowment Trust for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
I report to the Trustees on my examination of the financial statements of The Old Vic Endowment Trust (the charity) for the year ended 30 November 2018.
As the Trustees of the charity (and also its directors for the purposes of company law) you are responsible for the preparation of the financial statements in accordance with the requirements of the Companies Act 2006 (the 2006 Act).
Having satisfied myself that the financial statements of the charity are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of the charity’s financial statements carried out under section 145 of the Charities Act 2011 (the 2011 Act) . In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charity as required by section 386 of the 2006 Act; or
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
Donations
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
The Old Vic Endowment Trust is a private company limited by guarantee incorporated in England and Wales. The registered office is The Old Vic, The Cut, London, SE1 8NB.
The accounts have been prepared in accordance with the charity's Memorandum and Articles of Association, the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (as amended for accounting periods commencing from 1 January 2016). The charity is a Public Benefit Entity as defined by FRS 102.
The charity has taken advantage of the provisions in the SORP for charities applying FRS 102 Update Bulletin 1 not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling , which is the functional currency of the charity. Monetary a mounts in these financial statements are rounded to the nearest £.
The accounts have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
At the time of approving the financial statements , the Trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the accounts.
Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.
Investment income is recognised on receipt. All other income is included on an accruals basis.
Cash donations are recognised upon receipt. Other donations are recognised once the charity has received a firm commitment to payment. Any income tax recoverable is included at the time of the donation.
Liabilities are recognised as soon as expenditure is incurred and there is a legal or constructive obligation committing the charity to the expenditure. All expenditure expended is accounted for on an accruals basis. Irrecoverable vat is charged to the expense to which it relates.
Charitable expenditure includes grants and donations made to institutions which are included in the accounts when paid or when a firm commitment is given to a charity prior to the balance sheet date which is a constructive obligation. Also included are support costs which include governance costs.
Governance costs primarily related to accountancy fees payable.
Costs of raising funds are those costs incurred in generating investment income and donations.
Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year . Transaction costs are expensed as incurred.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which comprise cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, comprising creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future p aymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
Donations
Costs of generating donations
Insurance
Bank charges
None of the Trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year (2017 - £nil).
Other investments
The movements of the unrestricted funds which include the revaluation reserve are as follows:
Income
Expenditure
Revaluations, gains and losses
During the year the charity received voluntary donations totalling £20,000 (2017 - £79,320) from The Old Vic Theatre Trust 2000, a connected charity with common trustees.
The charity also paid out donations totalling £202,162 (2017 - £191,026) to The Old Vic Trust Theatre 2000.