The trustees present their annual report and financial statements for the year ended 31 August 2025.
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, 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's objectives is managing the hall to conform with the local statutory authorities and voluntary organisations in the area. Every effort is made to advance education and provide facilities in the interests of social welfare recreation and other leisure time occupations, with the clear objective of improving the quality of life for the people living in the area.
The directors of the charity represent a wide section of hall users, with regular feedback from many organisations and groups who use the hall and its facilities.
The hall continues to offer a high standard of service and facilities to the community and the charity can look forward to the future with confidence.
Thanks must be given to all the volunteers who give their time and commitment to running and maintaining the hall and providing a valuable service to the community.
The Association had a surplus of £307 (2024: deficit £(10,835)). Unrestricted reserves totalled £57,367 (2024: £58,524).
The Trustees maintain reserves at a level which is adequate to meet the cashflow requirements of the association. The overall reserves level of £433,860 (2024: £433,553) is considered to be an acceptable level.
Risk factors
The trustees has assessed the major risks to which the charity is exposed, in particular those related to the operations and finances of the company, and are satisfied that systems are in place to mitigate exposure to the major risks.
The Association is governed by its Memorandum and Articles of Association and was incorporated on 17th November 1995. All directors of the company are also trustees of the charity, and there are no other trustees. The policy and general management of the affairs of the Association is directed by a Board of Directors. All management decisions are made at regularly convened meetings.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
All full members and representatives of constituent bodies and sections shall be eligible to stand for appointment to the board. One third of the board members, step down and can seek re-election at the next annual general meeting.
New trustees are provided within information necessary for the responsibility of holding office from the existing or past board members and from information available from OSCR.
All of the trustees are members of the charity and guarantee to contribute £1 in the event of a winding up.
The trustees' report was approved by the Board of Trustees.
I report on the financial statements of the charity for the year ended 31 August 2025, which are set out on pages 4 to 14.
It is my responsibility to examine the financial statements as required under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and to state whether particular matters have come to my attention.
In the course of my examination, no matter has come to my attention
1. which gives me reasonable cause to believe that in any material respect the requirements:
to keep accounting records in accordance with Section 44(1)(a) of the Charities and Trustee Investment (Scotland) Act 2005 and Regulation 4 of the Charities Accounts (Scotland) Regulations 2006, and
to prepare financial statements which accord with the accounting records and comply with Regulation 8 of the Charities Accounts (Scotland) Regulations 2006
have not been met, or
2. to which, in my opinion, attention should be drawn in order to enable a proper understanding of the financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Sound Community Association is a private company limited by guarantee incorporated in Scotland. Guarantees have been given by the trustees totalling £1 each. The registered office is Sound Public Hall, Sound, Lerwick, Shetland Isles, ZE1 0SS.
The financial statements have been prepared in accordance with the charity's charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) 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 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 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 trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. The trustees continue to adopt the going concern basis of accounting in preparing the financial statements as new members are actively being sought to help share the work to prevent the Hall from closure.
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 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.
Permanent grant funds are grant funding that has been received in respect of specific capital expenditure.
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. The income from fundraising ventures is shown gross, with the associated costs included in fundraising costs.
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:
Depreciation has ceased on the public hall as the property is considered to have a useful life as a building of greater than 50 years and so any depreciation charge is considered immaterial. The trustees consider that this departure from United Kingdom Generally Accepted Accounting Practice is necessary in order to provide a true and fair view.
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).
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.
In the application of the charity’s accounting policies, the trustees 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.
Bar takings
Lets
Dances, raffles and miscellaneous
Raising funds
Dances, raffles etc
Bar purchases, adjusted for stock movements
Bank charges
Water rates
Electricity
Insurance
Repairs and renewals
Telephone
Stationery, postage and adverts
Licences
Donations
Entertaining
Senior citizens
Honorariums are paid for holding the offices of: Secretary, Treasurer, Caretaker, Bar manager, Assistant bar manager and Bookings clerk. These are paid through the payroll system annually.
Remuneration is paid to trustees as confirmed in the Memorandum and Articles of Association. Trustees are not remunerated for their work as trustees but for the work they perform in the course of their employment with Sound Community Association.
The following trustees were remunerated in the year:
LG Arcus - wages and honoraria of £849 (2024: £1,065)
D Sinclair - wages and honoraria of £0 (2024: £1,009)
JM Sinclair - wages and honoraria of £2,110 (2024: £2,075)
L MacMillan - wages and honoraria of £1,506 (2024: £1,356)
SD Ruddock - honoraria of £650 (2024 £766)
RA Bremner - wages of £780 (2024: £853)
GS Leask - wages of £454 (2024: £670)
M Thomason - wages of £0 (2024: £26)
K Murray - wages of £347 (2024: £603)
R Bremner - wages of £61 (2024: £636)
M MacMillan - wages £811 (2024: £0)
L Setrice - wages of £226 (2024: £0)
R Card - wages of £134 (2024: £0)
The above parties are considered to the Key Management Personnel of the charity.
Expenses are not paid to trustees.
The average monthly number of employees during the year was:
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.
General Restricted funds: relate to funding from the Sound Hall Trust to be used for the O.A.Ps in the Sound area. It also included funding from the National Lottery and Coastal Communities for the purchase of a new fire door and cookers.
Permanent Grant Fund: relates to funding from various funding bodies for the purchase of fixed assets.
There were no disclosable related party transactions during the year (2024 - none).