The Trustees who are also Directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 March 2023. The Trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).
The financial 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 [governing document], 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)" (effective 1 January 2019).
The objective of the charitable company is to improve the well-being and self-esteem of persons living with dementia by the organisation and playing of interactive musical concerts.
The Trustees confirm that they have complied with the duty under Section 4 of the Charities Act 2006 by referring to the charity commission's general guidance on public benefit when reviewing the aim and objectives of the charity and in planning its future activities. In particular, the Trustees consider how planned activities will contribute to the aims and objectives they have set.
2022/23 was a year during which Lost Chord found its feet again, following the pandemic. Under the Leadership of CEO Ms Clare Langan, normal service was steadily resumed with increasing numbers of concerts in care homes and services expanded to provide community interactive music sessions and community singalong sessions. Bedside 1-2-1s also continued.
Plans to resume grant applications did not materialize in 2022/23 due to the CEO being immersed in operational and charity modernisation activities. Despite this, Lost Chord emerges from the year in a strong financial position due to its significant reserves but it should be noted that increased fund-raising activities will be needed to avoid further operational losses in 2023-24.
The Memorandum and Articles of Association were completely revised to reflect the modern, forward looking and renamed Lost Chord UK.
The charity is fortunate and very proud to have a group of talented, compassionate and professional musicians eager to provide a range of musical sessions alongside our dedicated volunteers and supportive Patrons.
The CEO, working with the Trustees, have an excellent and exciting opportunity in 2023-24 to ensure the charity goes from strength to strength.
Our vision is to be the ‘go-to’ outreach session provider for care homes, day centres and memory cafés and to also run our own community events, eventually to have sessions running in every county in England and be operational in Wales, Northern Ireland and Scotland.
The accounts for the year to 31st March 2023 show a loss of £35,016 in comparison with the year ending 31st March 2022 which showed a profit of £7,489. However Lost Chord UK is still in a strong position to support the work of the charity into 2023/24 with fund balances at 31st March 2023 standing at £362,163.
Operational Income increased from £11,130 in 2022 to £39,676 in 2023, reflecting the post pandemic renewal of services.
Donations and grant applications reduced from £116,129 in 2022 to £84,958 in 2023. There was plenty of successful but relatively small scale fundraising activity and the lack of grant applications made was apparent.
Costs were well controlled and in line with the increased activity of the charity.
The legacy from the Jenny Gregorian Estate has not yet been received. This legacy is reflected in the 2022 accounts as ‘legacies receivable £75,000’. It should be noted that this is the anticipated amount we will receive from the sale of the property and other assets based on correspondence from the solicitor of the estate. The house is yet to be sold and this amount is by no means guaranteed to be received given the current economic climate. The Trustees are extremely grateful to receive such a significant legacy.
Surplus funds are currently invested on a basis that is considered to be relatively risk free.
Reserves policy
The Charity Commission for England and Wales requires charities to have a policy on the level of reserves held by the charity. This is to ensure that charities spend money on the purposes for which the charity was set up rather than simply accumulating cash. The policy of Lost Chord is to ensure that should funding materially deteriorate, for whatever reason, then it would have time to consider alternative funding options and, in the worst scenario, be able to manage the closure of its operations and obligations in an orderly fashion, both of which combined would take in the order of six months. Such obligations would include staging concerts already committed to, terminating its contractual commitments and the payment of salaries. In ordinary times, Lost Chord aimed to maintain reserves of at least six months but no more than nine months of annualised operating expenditure but due to the pandemic this has not been possible.
Funding has traditionally been applied for on a three-year basis which could mean that funds received in year one may not be used until year three so that the charity can periodically accumulate significant funds. However, the grants that are received in advance are treated as deferred income to be utilised for the payment of future expenses.
The charity plans to continue the activities outlined above for the forthcoming years, subject to satisfactory funding and donations and intends to implement a strategic plan which may involve some consolidation of services around our core offerings where we can most effectively leverage the charities resources.
To support the growth of the charity it is imperative that the charity recruits operational support to allow the CEO to resume grant applications and focus on the promotion of the charity and its fundraising.
Lost Chord must continue to innovate and evolve in order to survive in the highly competitive market. We must also continue to respond to the rapidly increasing numbers of dementia diagnoses which sees people living with the disease in community.
The Charity is a company limited by guarantee and was incorporated on 10 June 2003. The Memorandum of Association established the objects and powers of the charity and it is governed under its Articles of Association. The Charity was registered as a charity on 11 September 2003. Prior to 10 June 2003 Lost Chord was a project run under the auspices of Voluntary Action Rotherham and has been delivering services since 1999.
The Trustees, who are also directors and members of the charity, are recruited by networking and are selected following a skills need analysis by the Trustees. Any appointment of a Trustee is made by a resolution of the board of Trustees and is formally minuted.
The Trustees retain overall responsibility for the charity's strategies and policies and delegate the operational management to the chief executive. The Trustees continue to review corporate governance including contracts, employment policies and management practices to ensure continued compliance.
The charity works independently though seeks to fulfil its objects by working collaboratively with other organisations such as Making Space performing concerts in their day centres in South Yorkshire. Lost Chord is a member of the National Dementia Action Alliance working alongside member groups such as Age UK, Alzheimer's Society and Dementia UK.
The Trustees have a duty to identify and review the risks to which the charity is exposed and to ensure appropriate controls are in place to provide reasonable assurance against fraud and error.
As a matter of best practice, the directors are conscious of the need to consider risk management. The charity has initiated standard accounting systems to mitigate financial risk, whilst holding regular meetings involving strategic planning and review to mitigate risk generally.
The trustees' report was approved by the Board of Trustees.
I report to the trustees on my examination of the financial statements of Lost Chord UK (the charity) for the year ended 31 March 2023.
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).
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.
The notes on pages 7 to 14 form part of these financial statements.
Lost Chord UK is a private company limited by guarantee incorporated in England and Wales. The registered office is The Wesley Centre, Blyth Road, Maltby, Rotherham, S66 8JD.
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.
The charity has taken advantage of the provisions in the SORP for charities not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. 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 financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, evidence is available to support an estimate, and receipt is expected.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
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 include debtors and 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, including creditors and bank loans 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 payments 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.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Grants
Interactive musical concerts
Interactive musical concerts
Rent and rates
Insurance
Legal and professional
Telephone
Travel
Printing and stationery
Hire of equipment
Computer running costs
Bank charges
Sundry expenses
The average monthly number of employees during the year was:
The remuneration of key management personnel is as follows.
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
During the year the charity entered into the following transactions with related parties: