The directors present their annual report and financial statements for the year ended 30 November 2024.
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 the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" 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)".
The Society is a charity registered in Scotland whose objects are charitable and the purposes for which the Society is established shall be wholly and exclusively charitable.
The Society's objects are, for the benefit of the public, to advance education, heritage and science and animal welfare by:
Educating the public generally, and breeders and farmers in particular, regarding breeding, feeding and welfare of Beef Shorthorn cattle.
Promoting scientific research into the breeding, feeding and welfare of Beef Shorthorn cattle and to use the results thereof to encourage and support best practice.
Promoting excellence in Beef Shorthorn cattle and advancing education and/or scientific research into the breed through exhibitions and other shows and by awarding prizes, awards and/or bursaries in connection therewith.
Otherwise promoting and safeguarding the integrity and continuation of the Beef Shorthorn cattle breed, reflecting its heritage and its current form.
Promoting research into, and best practice of, the Beef Shorthorn breed’s role in environmentally sustainable and ecologically sound farming systems and furthermore in developing and promoting their part in contributing to the nutritional needs of the population.
Our full strategy is available at https://www.beefshorthorn.org/bsh-long-term-strategy/
Our vision is for the Beef Shorthorn to become the native beef breed of choice. We envision a future where the Beef Shorthorn breed is recognised for its exceptional quality, versatility, sustainable production, and cross breeding credentials. By promoting and nurturing the breed and its traditional characteristics, we aim to establish the Beef Shorthorn as the preferred choice among beef producers, consumers, and the wider beef industry.
Public benefit
The directors have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.
Our year to 30 November 2024 is best summarised by our President Tim Riley:
“I have great pleasure in introducing the Annual Report for 2024 which summarises the events of 2024 and showcases where the Board and Society staff have sought to continually modernise and improve the service to the membership. Equally, we continue to position the Beef Shorthorn foremost in the minds of the beef industry.
This is my second and final report as President in what has been another challenging year for agriculture but a year of progress and success for Beef Shorthorns. I can report that the Society is in a healthy financial position – the best it has been in terms of wisely invested reserves and funds to use toward future strategy and improved services for our members.
The Society has continued to improve its governance so our members can be assured that the money is used, and decisions made, sensibly and legally. This is important when working on behalf of our growing membership.
Effort by the Board and Members has been great to see in the Development days which everyone enjoys so much and the successes at Sales and Shows. This year I represented the Society at the Royal Highland, Royal Welsh, Great Yorkshire and our National Show at Westmorland. The quality of cattle going forward is tremendous and the breed is considered a mainstream commercial choice by an increasing number of farmers. We were hugely grateful to Our Patron HRH Princess Anne for visiting the wonderful Development Day hosted so generously by Charles and Sally Horrell in September 2024. It was a fantastic success.
Successful Society sales have returned great publicity for the breed and at the commercial level, prices have been strong as the National Herd size reduces and limits supply. However recent announcements on Agricultural Property Relief and other budget measures threaten to dampen market confidence. This all adds up to growing peoples’ awareness of the value of a low input breed that delivers on any ground or system. This must be a priority for the Society going forward.“
Education programme and events
The Society has run a large programme of events over the year with the aim of demonstrating the quality of the Beef Shorthorn through Society and supported sales across the country and major agricultural shows. We have also delivered webinars and on farm events to educate members as well as highlighting the importance of the Beef Shorthorn to the environment and for the benefit of the farming community and the general public.
Pedigree registration
The purity of the Breed remains paramount and conditions for entry into the Coates Herd Book are determined by strict rules which are kept under constant review. The Society has continued the inspection process during the year to ensure that the registration rules are followed.
The Society’s financial strategy is for:
Regular member services at, or close to, break even.
The investment portfolio to provide contingency and development reserves.
The Society has delivered a satisfactory financial performance for the year with a surplus of £8,126 (2023 - £33,974) on member services and investment income of £29,546 (2023 - £34,508) giving a net income before investment gains of £37,672 (2023 - £68,482). With unrealised and realised gains in investments of £117,991 (2023 - loss £30,719), the net income for the year totals £155,663 (2023 - £37,763).
The Society is financially stable with a strong balance sheet and an investment portfolio providing sufficient reserves for contingencies.
Investments
The Society is fortunate to hold an investment portfolio which is managed on a discretionary basis by Evelyn Partners, one of the country’s leading wealth management providers.
The investments are managed on a long-term basis with a risk profile of approximately 65% invested in equities and 35% invested in a mix of fixed interest and alternatives. Recent investment performance has been satisfactory with a growth of 14.9% over the year, while the portfolio has risen by 30.9% over the last 5 years and 179.8% since inception (31st December 2009). During the year a further £100,000 was invested in this portfolio.
Members of the Finance Committee meet regularly with Evelyn Partners to monitor performance.
Risk management
Our principal risks relate to the maintenance of all sources of income, the retention of staff, the containment of inflationary costs and the use of modern software for efficiency of back-office processes. A risk map with these risks and mitigating controls and actions is presented to the Board quarterly.
Our registration software from ABRI is now old and cumbersome and its planned replacement, Breed Logic, is expected to be delivered in 2025. This new system will enable the Society to realise several efficiency benefits arising from the use of modern technology.
Reserves policy
Unrestricted funds are sufficient at £1,214,971 (2023 - £1,059,308) as set out in note 21. The directors have a policy to maintain unrestricted funds of two years normal annual expenditure as a contingency for business protection and uncertainty which amounts to £909,920 (2023 - £896,344). This leaves £239,742 (2023 - £93,481) available for investment. The trustees have also designated amounts for the development of breed, youth, and member services.
Restricted reserves, where usage is for specific purposes as set out in note 20, are £856 (2023 - £360).
The Directors see a strong future for the Beef Shorthorn breed; commercially and environmentally relevant for low input systems producing high eating quality beef requiring little or no finishing on cereals. The breed has a key role in both food security and environment sustainability.
The directors who served during the year and up to the date of signature of the financial statements were:
Recruitment and appointment of trustees
None of the directors has any beneficial interest in the company. All of the directors are members of the company and guarantee to contribute £1 in the event of a winding up.
Directors
As set out in the Articles of Association, Directors are elected by the members at the AGM to serve a period of three years. Overall policy is determined by the board of Directors. Day-to-day operations are the responsibility of the Company Secretary .
It is important for any Board to use the experience of Directors to best advantage. Accordingly, Directors are invited to join relevant Board Committees, Finance & Audit Committee, Breed Development Committee, Judges, shows and sale committee, Marketing, PR & Communications Committee, Member Development (new committee introduced in 2024) and the Remuneration Committee. These Board committees are tasked with developing actions for approval by the Board against our charitable objectives.
Induction and training/development of directors
New Directors are now provided with information detailing their roles and responsibilities, copies of the previous annual report and accounts and previous board minutes. In addition, each have a meeting with key staff or fellow Directors to discuss how the Society is run and their role as a director. Directors are required to have the appropriate skills to carry out their role and development is encouraged by the Society by organising training and refresher events and issuing information on governance matters. Directors are asked to review and sign a Directors’ Code of Conduct and meet their fiduciary responsibilities to the Society.
Renumeration committee
The remuneration committee reviews the performance and terms, conditions, and remuneration of staff. To provide for independence this committee is chaired by an experienced member of the Society who is not a director; currently the committee chair is Sally Horrell.
The directors' report was approved by the Board of Directors.
The directors, who also act as trustees for the charitable activities of #cd2, are responsible for preparing the Directors' 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 directors 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 directors 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; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The directors 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, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 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.
Opinion
We have audited the financial statements of Beef Shorthorn Cattle Society (The) (the ‘charity’) for the year ended 30 November 2024 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
We have nothing to report in respect of the following matters in relation to which the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:
the information given in the financial statements is inconsistent in any material respect with the directors' report; or
proper accounting records have not been kept; or
the financial statements are not in agreement with the accounting records; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with the Act and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charity’s trustees, as a body, in accordance with Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charity’s trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
Derek Grant, CA is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Beef Shorthorn Cattle Society (The) is a private company limited by guarantee incorporated in Scotland. The registered office is Chapelshade House, 78-84 Bell Street, Dundee, DD1 1RQ.
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006 the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" 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)". The charity is a Public Benefit Entity as defined by FRS 102.
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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the directors have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the directors 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 directors 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.
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.
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.
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).
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
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.
In the application of the charity’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The average monthly number of employees during the year was:
The remuneration of key management personnel was as follows:
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.
Pedigree Sales Herd Competition Fund: donation received to be distributed for future prize awards at Society events.
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.
Youth Development Fund: reserves allocated by Directors to be used for youth development.
Members Development Fund: reserves allocated by Directors to be used for member development.
Breed Development Reserve: the Directors have allocated reserves specifically to support Breed Development projects to enhance stock knowledge and invest in maintaining the purity of the breed.
Bi Centenary and Strategic Development Fund: the Directors had allocated reserves specifically to support the 200th celebrations of the Breed in 2022 as well as strategic investment in the promotion and longevity of the Society. In 2023, the balance held on this fund was reallocated to the other funds.
Business Protection Reserve: as per the directors policy for reserves, these monies are to cover two years of charitable expenditure.
A kind donation from Major Gibb, known as the Glenisla Fund was amalgamated into the General Fund in 2017.
During the year the charity entered into the following transactions with related parties:
Travel and accommodation expenses totalling £4,714 were paid to directors for the year ended 30 November 2024 (2023 15 mths - £6,686).
The charitable company has received income from directors who are also members, in the normal course of business, totalling £19,169 (2023 15 mths - £23,401).
A total sum of £585, (2023 15 mths - £700) was paid to Agriimages in the period. Agriimages is owned by Alfie Shaw who was a director of the Society during the year, payments being for photography services provided to the Society.
A total sum of £2,716 was paid to Rebecca Mair, wife of director Kenneth Mair, for marketing and public relations services during the period. (2023 - nil).
The society is fortunate to have a board of directors who support its activities on a voluntary basis.
The charity had no material debt during the year.