The trustees present their report and the consolidated financial statements of the charitable company and its subsidiary for the year ended 31 March 2025.
The company information forms part of this report. The financial statements comply with the charity's Memorandum and Articles of Association, the Companies Act 2006, 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)".
Principal Activity
Birnam Arts is an Arts and Community Centre supported by a Beatrix Potter exhibition, shop and a café.
The charitable purposes of Birnam Arts are:
To provide community and recreational facilities with the objective of improving the life of the members of the community in The Parish of Dunkeld and the public generally;
To encourage and promote the arts, science, heritage and culture; and
To provide training and education in the arts, science, heritage, culture and for social and personal development.
The primary objectives are to provide:
Facilities for community activities including drama, crafts and arts workshops, dance, music, recreational activities and meetings;
Facilities for art exhibitions;
A wide ranging arts programme;
A Beatrix Potter exhibition area incorporating displays and children's activities ;
A café providing meals and light refreshments;
A shop selling Beatrix Potter giftware and craft goods; and
A wide range of volunteering opportunities.
During 2024-25 Birnam Arts sought to increase ways to contribute and enhance the cultural fabric of the communities we serve. We strive to be a vibrant community hub for creativity, education, entertainment and engagement, serving as a platform for artists, audiences, and learners of all ages.
The past year has also been one of resilience and adaptation, particularly in navigating the ever increasing difficult challenges posed by the economic environment. In January 2025, we were delighted to hear that we have secured MultiYear funding from Creative Scotland - bringing in £293,000 to help support organisational activity for the next three years.
We are proud to continue to host Birnam Library, which is of great importance to the community and at the heart of our venue. We are very relieved to hear that funding is guaranteed to keep it open for the next two years.
2024-25 at Birnam Arts in numbers:
361 days open to the public.
43 performances in our auditorium.
8 free exhibitions.
46 creative workshops and classes.
40,000 conversations over cups of coffee in our café.
5 full time and 14 part time staff employed
Participation at a glance:
23,730 people attended a show, talk, film or exhibition.
40 valued volunteers supported us.
1,115 community members participated in workshops and classes.
138 artists and creatives were employed.
7,177 visitors to our Beatrix Potter exhibition.
17 organisations benefiting from community room hire discounts.
Audience demographics
We estimate that 85,000 people – audiences, participants and visitors came through the doors between April 2024 - March 2025.
11,900 visitors came from outside Perthshire, adding a potential spend of nearly £500,000 into the local economy.
21% of audience members and participants were under 18, and research shows that there is a demonstrable correlation between schoolchildren’s grades in maths and literacy, and their involvement with drama or music activities - called the ‘Mozart Effect’.
Engaging with our community
We carefully programmed to accommodate all our community. For adults, we offered regular daytime creative and wellbeing sessions as well as evening and weekend classes and events.
We ran specialist projects such as Free Film Wednesdays and Ageing Creatively for older people and hosted Just Singin, a community choir open to everyone, and accessible to people with dementia. We offer after-school and holiday activities for children and daytime sessions for preschoolers. We offer term-time blocks of sessions as well as one-off activities are available.
Many of our activities are priced on a sliding scale to be inclusive to people from all economic backgrounds. We are proud of the opportunities offered by our ballet school - after-school and holiday activities for children, daytime sessions for pre-schoolers and adult classes as well, which are subsidised by Birnam Arts to make classes affordable.
This year we have consulted local parents and families of children with additional support to provide feedback on our offer and to improve our services. Their ideas included decluttering the art studio, more library-based activities, calm boxes to be available in the cafe and during events and more flexible pricing structures.
Users of our spaces
We offer bright, welcoming spaces which are booked by a variety of non-profit and private organisations when we are not using the spaces for our own, or community, activities. We provide technical support and catering for conferences, weddings and private hires such as birthday parties. Our offer is unique in the local area and we attract customers from far and wide.
National organisations and public bodies who used our meeting and conferences spaces included.
PKC Countryside Trust, Nature Scotland, Forestry Policy Group, Scottish Venison, Mountaineering Scotland, The Munro Society, Scottish Badgers Society, The Hutton Institute, Jacobs, Atholl Estates, Fishers Management Scotland, Scottish Forestry, Crown Estate Scotland, Growbiz, Live Active, and The Arts Society. We also hosted three weddings, a couple of ceilidhs, plus multiple celebration parties.
Community organisations using our spaces included Dunkeld and Birnam Climate Cafe, Dunkeld Community Care, PKVAS, PH8 Community Trust, Traditional Arts & Culture Scotland, First Responders, the Gardening and Growing Club, A9 Community Group, SWRI, Dunkeld and Birnam Repair Cafe, Bridge Club, Dunkeld and Birnam Angling Club and Dunkeld and Birnam Junctions Action Group.
23,730 audience members attended events and performances and 1,115 members of the community took part in workshops and classes – with all the attendant benefitsto their health and wellbeing from participating in arts and other community activities.
Beatrix Potter exhibition
Our interactive Beatrix Potter exhibition is on the ground floor of our building and is well-loved by families. The exhibition contains replica letters, artefacts and drawings relating to Beatrix Potter, as well as children’s play zones such as a Victorian school room and market stall. Approximately 7,177 people attended the Beatrix Potter exhibition this year.
Gift shop and café
Our gift shop sells a range of Beatrix Potter-inspired gifts, as well as providing a platform for Perthshire-based artists and makers to sell their work.
In our cafe, we seek to source ingredients that include Scottish grown and harvested produce wherever possible. We work with local producers including the Taybank Growers Coop, Stewart Tower Dairy and ARAN Bakery. The Field community growing project also sell their seasonal fresh produce at Birnam Arts.
The gift shop and café sourced products from 20 local suppliers and makers to a value of £28,200.
Supporting community activities
Birnam Arts is home to several local community groups and festivals which are supported by us through reduced studio, auditorium and meeting room rates (our subsidised community booking rate), marketing promotion including poster design and distribution, social media across multiple channels, in print and on our website, staffing, box office and wider promotion (for festivals). Our community hire rate is available when a class or group is a not-for-profit organisation or if the class is for wellbeing activities, is made affordable to participants, and is open to everyone.
This year, we hosted a plethora of community activities, including:
Birnam Institute Players – local amateur dramatic society
Just Singin’ Community Choir
Blow & Blast woodwind ensemble sessions
Kids Art Club programme of weekly visual
Arts workshops
Pottery Classes with Kiln Creative
Pete Clark Fiddle Masterclasses - week-long music courses in Scottish fiddle tuition held twice a year, which attracts internationa lstudents
Neil Gow Festival (March 25) Celebration of the 18th-century local fiddler / composer through workshops, classes and concerts.
Scottish Community Amateur Drama Festival and Scottish Youth Community
Amateur Drama Festival
Dunkeld and Birnam Repair Cafe
Wellbeing and learning activities included:
Thai Chi,
Ballet for adults
Pilates,
French Conversation Cafe,
Tiny Tunes (pre-school singing sessions)
Birnam Book Festival (Oct ‘24) – A collaboration between Birnam Arts and the Birnam Reader Bookshop, showcasing literature from Scotland and beyond.
LEGO club with children with additional support needs / neurodiversity, organised by the parent council of Dunkeld Primary School.
Wider community impact
During 2024-25, we employed 5 full time and 14 part time staff, drawn from local residents as well as throughout Highland Perthshire, including several young people.
30 people volunteered their time, skills and energy in areas such as front of house, working in the shop and assisting families attending the Beatrix Potter exhibition.
Our Board of nine trustees also give their time voluntarily and continue to play a key role in overseeing our effective governance and financial accountability.
BA’s Impact Report for 2024-25 can be found on our website at:
https://birnamarts.com/pubd/images/68388679-FINAL-2024-25-BA-Impact-Report-smll.pdf
Financial Performance
The operating environment continued to present Birnam Arts with challenges through 2024-25. Whilst year on year the size of the deficit reduced, this was not enough of a recovery to warrant maintenance of the status quo (see ‘Future Strategy’ section).
Positively revenues continued the upward trend seen over the prior two years post COVID. This was largely driven by increased success in generating grant, legacy and fundraising income. On the commercial side of the organisation, overall increases in income (up 7%) outstripped cost of sales (up 6%).
Despite these encouraging signs, expenses remained stubbornly high. Savings made across areas such as building maintenance were wiped out by increases in utility costs. Gas charges, in particular, increased £20k YoY but there were increases in water rates and telephone / broadband costs also.
The results for the year are set out in the consolidated statement of financial activities on page 14.
Given the extent of the working capital pressures, the trustees acknowledge that a material uncertainty exists which may cast significant doubt on the charity’s ability to continue as a going concern. The trustees have nevertheless concluded that it remains appropriate to prepare the financial statements on a going concern basis. This assessment is dependent on the successful implementation of the remedial actions and the timely securing of additional funding.
Reserves policy
The trustees have established a policy to maintain unrestricted funds, which are the free reserves of the group, at a level which equates to approximately 3 months unrestricted expenditure. At present the free reserves are £NIL (2024: £17,552) which is below the target level. Currently, unrestricted reserves at 31 March 2025 amount to negative £70,223. Total funds amount to £1,240,975 (2024: £1,352,164) of which £1,311,198 (2024: £1,334,612) are restricted.
The trustees have assessed the major risks to which the charity is exposed, and in response, management has commenced a critical review of the charity’s business model and cost structure. Efforts are also ongoing to secure additional unrestricted funding to stabilise the working capital position. However, there is currently no certainty that these actions will deliver the necessary improvements within the required timescales.
For several years prior to 2025, the organisation operated at a slight deficit, requiring us to draw on our financial reserves. While COVID recovery funds and the furlough scheme provided temporary relief, they did not resolve these underlying financial issues. Our successful bid for multi-year funding from Creative Scotland in early 2025 seemed to show a secure future.
However, although revenues recovered to pre-COVID levels, the impact of substantial increases in energy costs (by at least 40% since COVID) and salary costs (due to increases in the Living Wage and NI), plus the increasing costs of having to maintain an ageing building, meant that by Spring 2025, the organisation was in a critical financial position. This was highlighted by the auditors who stated a risk of the organisation being unable to continue as a going concern.
At the AGM in April 2025, the board unequivocally stated the unsustainable financial position and the possibility that the facility may have to close in the coming months. It was clear that significant changes had to be implemented.
Following the AGM and engagement with key stakeholders (funders, PKC, local individuals and groups), the Board concluded that a radical re-think was required to maintain and continue operations. It was recognised that a fundamental reset was required rather than incremental change. Previous attempts at improvement have not addressed systemic challenges; this proposal was a radical review of how Birnam Arts operates, with extensive community and stakeholder engagement at its heart.
Given this context, in September 2025, the Board of Trustees launched a Transformation Project with two aims:
1. Keep Birnam Arts open and operational, delivering community events and funded arts programmes. The ongoing operation of the facility, with essential short-term changes, was considered vital to maintain funder and community support.
2. Develop a new, sustainable business model by March 2026, aligned with our charitable purposes and rooted in community priorities. The aim is to have a clear plan for implementation of the new model in Q1 2026 with key elements of the model in place by end March.
The company is a charitable company limited by guarantee. Permission has been granted by the Secretary of State for Trade and Industry for the word 'Limited' to be omitted.
The trustees, who are also the directors for the purpose of company law, who served during the year and up to the date of signature of the financial statements were:
The number of trustees shall not be less than three and not more than fifteen. The board of trustees may at any time elect new or additional trustees as required.
None of the trustees have any beneficial interest in the company. All of the trustees are members of the company and guarantee to contribute £1 in the event of a winding up.
Subsidiary
Birnam Arts is the parent of a small group.
The principal activity of the subsidiary is the retail sale of merchandise, refreshments and corporate events.
Risk Management
The trustees have a risk management strategy which comprises:
an annual review of the principal risks and uncertainties that the charity and its subsidiary Birnam I Limited face;
the establishment of policies, systems and procedures to mitigate those risks identified in the annual review; and
the implementation of procedures designed to minimise or manage any potential impact on the charity should those risks materialise.
This work has identified that financial sustainability is the major financial risk for both the charity and its subsidiary. A key element in the management of financial risk is a regular review of available liquid funds to settle debts as they fall due, regular liaison with the bank, and active management of trade debtors and creditors balances to ensure sufficient working capital by the charity and its subsidiary company.
Attention has also been focused on non-financial risk arising from fire, health and safety of artist and audience, management of performing rights and food hygiene. These risks are managed by ensuring accreditation is up to date, having robust policies and procedures in place, and regular awareness training for staff working in these operational areas.
The trustees hold regular meetings between each annual general meeting, set the strategy and policy of Birnam Arts, generally control and supervise the activities of the charitable company, and in particular are responsible for monitoring its financial position.
The day to day operations are managed by the full-time General Manager, which is a salaried position and who reports to the board of trustees.
The trustees have considered a policy on trustee induction and training prior to new trustees being approached. This includes awareness of a trustee's responsibilities, the governing document, administrative procedures, the history and philosophical approach of the charity. A new trustee receives copies of the previous period's financial statements, minutes of the trustee's meetings and a copy of the OSCR leaflet 'Guidance for Charity Trustees - acting with care and diligence', if appropriate. Training is given to existing trustees as and when required.
The trustees comprise the board of trustees, who are the charity's directors and the senior management team comprise the key management personnel of the charity in charge of directing, controlling, running and operating the charity on a day to day basis. All trustees give their time freely and no trustee received remuneration or expenses in the year.
The pay of the senior management team is reviewed annually and normally increased in accordance with average earnings.
Birnam Arts is the parent of a small group. The principal activity of the trading subsidiary, BI Ltd, is the retail sale of merchandise, refreshments, and corporate events.
In accordance with the company's articles, a resolution proposing that MMG Archbold Limited be reappointed as auditor of the company will be put at a General Meeting.
The trustees, who are also the directors of Birnam Arts 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, 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.
The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Opinion
We have audited the financial statements of Birnam Arts (the ‘charity’) for the year ended 31 March 2025 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.
Based on our audit procedures and the information gathered during our examination, the financial statements have been prepared on a going concern basis. However, we draw attention to Note 1.2 to the financial statements, which describes the existence of a material uncertainty related to working capital cash flow.
The trustees are in the process of securing emergency funding and reviewing the business operating models to address the material uncertainty and support the entity’s ability to continue as a going concern.
Therefore, the financial statements may not be indicative of the entity's financial position and results of operations should the material uncertainty materialise adversely.
In forming our conclusion, we have considered the implications of the material uncertainty on the entity's ability to continue as a going concern. However, our opinion is not modified in respect of this matter.
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 trustees 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the trustees' Report which includes the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Trustees' Report which includes the Directors' Report has been prepared in accordance with the applicable legal requirements.
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 trustees' 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 trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose of company law, 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 trustees 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 trustees 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 trustees 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.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- the nature of the regulated sector, control environment and understanding of the entity including, but not restricted to, the understanding that the trustees are not remunerated, and the prevalence of fraud in the sector;
- results of our enquiries of trustees and management about their own identification and assessment of the risks of irregularities;
- any matters we identified having obtained and reviewed the Charity’s documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities that may exist within the organisation for fraud and identified the greatest potential for irregularities to occur is in relation to revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Charity operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Charity’s own Memorandum and Articles of Association, Companies Act 2006 and various other charity specific legislation, including The Charities and Trustee Investment (Scotland) Act 2005.
Our procedures to respond to risks identified included the following:
- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
- enquiring of trustees and management concerning actual and potential litigation and claims;
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
- reading minutes available of meetings of those charged with governance;
- tested a sample of income for understatement and consideration given to revenue recognition accounting policies.
- addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.
Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditors responsibilities. 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.
MMG Archbold Limited 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.
Income from grants and donations
Income from charitable activities
Income earned from other trading activities
Investment income
Rent received
Activities for raising funds:
Commercial trading operations
Charitable activities:
Exhibition centre, arts programme and community workshops
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derives from continuing activities.
The prior year Consolidated Statement of Financial Activities is provided on the next page.
Income from grants and donations
Income from charitable activities
Income earned from other trading activities
Investment income
Rent received
Activities for raising funds:
Commercial trading operations
Charitable activities:
Exhibition centre, arts programme and community workshops
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derives from continuing activities.
The trustees have prepared group accounts in accordance with section 398 of the Companies Act 2006 and section 138 of the Charities Act 2011. These accounts are prepared in accordance with the special provisions of Part 15 of the Companies Act relating to small companies and constitute the annual accounts required by the Companies Act 2006 and are for circulation to members of the company.
The following accounting policies have been applied in dealing with items which are considered material in relation to the charitable company and Group financial statements.
Group financial statements
These financial statements consolidate the results of the charitable company and its wholly owned subsidiary, Birnam I Limited, on a line by line basis. A separate Statement of Financial Activities and Income and Expenditure Account for the charity has not been presented because the charity has taken advantage of the exemption afforded by section 408 of the Companies Act 2006.
Birnam Arts is a private company limited by guarantee incorporated in Scotland. The registered office is Station Road, Birnam, DUNKELD, PH8 0DS.
Status of company and liability of members
On the winding up of the charitable company every member has undertaken to contribute to the assets of the charitable company for the payment of the debts and liabilities and of the cost of winding up the charitable company, such amount as may be required not exceeding one pound. If the winding up occurs within one year of a member ceasing to be a member then the above applies for debts and liabilities of the charitable company contracted for before they cease to be a member.
The financial statements have been prepared in accordance with the 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 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.
These financial statements are prepared on the going concern basis. The trustees have a reasonable expectation that the charity will continue in operational existence for the foreseeable future, however, the trustees are aware of certain material uncertainties which may cause doubt on the charity's ability to continue as a going concern.
The group has incurred operating deficits over a number of years, resulting in a deficit position on unrestricted funds and ongoing pressure on working capital. At the balance sheet date, the charity’s unrestricted funds were in deficit, and the group reported net current liabilities. In addition, the charity is reliant on continued grant funding and the successful implementation of measures to improve the sustainability of its operating model.
The trustees acknowledge that the historic operating model is no longer sustainable in its current form. During the year, the trustees initiated a formal Transformation Project aimed at stabilising the organisation in the short term and developing a revised operating model capable of delivering long-term financial sustainability, while continuing to meet the charity’s core objectives. Short-term stabilisation measures have been implemented, including operational changes, cost control initiatives, and active management of cash and creditor balances.
The trustees have prepared cash flow forecasts covering a period of at least twelve months from the date of approval of the financial statements. These forecasts indicate that the charity will be able to meet its liabilities as they fall due over this period, subject to the successful continuation of grant funding and the delivery of planned mitigating actions.
Notwithstanding these mitigating factors, the trustees recognise that the charity’s ability to continue as a going concern is dependent on the successful execution of the Transformation Project and continued access to funding. Accordingly, a material uncertainty exists which may cast significant doubt on the charity’s ability to continue as a going concern. The financial statements do not include any adjustments that would be required should the charity be unable to continue as a going concern.
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.
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. The following policies are applied to particular categories of income:
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, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.
The value of services provided by volunteers is not incorporated into these financial statements. Further details of the contributions made by volunteers can be found in the trustees' report.
Income from government and other grants whether 'capital' grants or 'revenue' grants is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably.
Grants and donations received towards capital expenditure are credited to the deferred capital grant account, thereafter being released to the statement of financial activities at the same rate as the depreciation of the assets to which the grants relate.
Income from admission fees is included in turnover in the period in which the relevant admission takes place.
Income from commercial trading activities is included in the period in which the trading subsidiary is entitled to receipt.
Interest is included when receivable by the group.
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.
Expenditure is included in the financial statements on an accruals basis and is recognised when there is a legal obligation to make a payment to a third party. Irrecoverable VAT is charged against the category of resources expended for which it was incurred as follows:
Costs of raising funds are those incurred in attracting voluntary income, and those incurred in trading activities that raise funds.
Charitable activities include expenditure associated with both the direct costs and support costs relating to these activities.
Governance costs include those incurred in the governance of the charity and its assets and are primarily associated with constitutional and statutory requirements.
Support costs include central functions and have been allocated on a basis consistent with the use of resources.
Certain expenditure is directly attributable to specific activities and has been included in those cost categories. Certain other costs, which are attributable to more than one activity, are appointed across cost categories on the basis of an estimate of time spent on these activities within the charity's whole operations including support costs as follows:
Conference room hire - 23%
Exhibition centre, arts programme and community workshop - 72%
Support costs - 5%
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.
Expenditure of less than £500 is not capitalised.
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, comprising goods for resale and consumable raw materials, are stated at the lower of cost and estimated selling price less costs to complete and sell.
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.
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 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.
Tangible fixed assets are depreciated over a period to reflect their estimated useful life. The applicability of the assumed lives is reviewed annually, taking into account factors such a physical condition, maintenance and obsolescence.
Accruals are applied at the year end based upon financial costs received post year end and the experience of the trustees.
The consolidated statement of financial activities includes the results of the charity's wholly owned subsidiary, Birnam I Limited, which operates the café, shop and catering operations.
The summary financial performance of the charity alone is:
Income from grants and donations
Income from charitable activities
Exhibition Centre, arts programme and Community workshops
Other income
Income earned from other trading activities
The wholly owned trading subsidiary Birnam I Limited is incorporated in the United Kingdom (company number SC216180) and pays all of its profits to the charity under the gift aid scheme. Birnam I Limited operates the shop, café, catering operations and all commercial trading operations carried on at Birnam Arts, the charitable company.
Investment income
All of the group's investment income of £265 (2024: £694) arises from money held in interest bearing deposit accounts.
Rent received
Rental income relates to income received from Perth & Kinross Council for the rental of spaces used to accommodate the library, community learning office and for participation in the public toilet Comfort Scheme.
Activities for raising funds:
Commercial trading operations
Charitable activities:
Exhibition centre, arts programme and community workshops
Conference room hire
Exhibition centre, arts programme & community workshops
Conference room hire
Exhibition centre, arts programme & community workshops
Administration
Tutors
Arts programme costs
Legal & professional fees
Advertising
Maintenance costs
Utilities, rates & insurance
Charitable activities:
Exhibition centre, arts programme and community workshops
The basis of allocation is direct (2024: direct).
The average monthly number of employees during the year was:
Employment costs for the year were £345,712 (2024 - £289,429) of these costs £145,198 (2024 - £104,226) relate to the charity and are shown in note 9 and £200,514 (2024 - £185,203) relate to the subsidiary company and are included within the trading costs in note 8.
No employee had employee benefits in excess of £60,000 per annum.
The key management personnel of the parent charity, Birnam Arts, comprise the trustees, the General Manager, the Arts Development Manager, and the Visual Arts Manager. The total employee benefits of the key management personnel of the Trust were £103,812 (2024 - £61,758).
The key management personnel of the group, comprise those of the Trust and the key management personnel of its wholly owned subsidiary Birnam I Limited, the Shop Manager. The total employee benefits of the key management personnel for the group was £122,623 (2024 - £78,186).
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 charity holds 1 share of £1 in its wholly owned trading subsidiary company Birnam I Limited, incorporated in Scotland, company number SC216180. It is the only share allotted, called up and fully paid. The activities and results of this company are summarised in note 5.
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.
Contributions payable to the fund at the year end amounted to £1,215 (2024: £998).
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.
Capital grants are grants received by Birnam Arts to fund the building of the property and the exhibits housed there.
Misses Barrie Charitable Trust made a donation to fund music and movement workshops at local primary schools.
CAF Foundation funding is to fund the costs of updating the Beatrix Potter exhibition.
Creative Scotland Sustaining Creative funding is to be used to fund the cost of preparing a streamlined Arts Programme.
The CheckIn Works grant is for the purchase of personal protective equipment (PPE) due to COVID-19.
The Arts Society - Dementia Pilot is funding towards the pilot of the Arts for Dementia Sufferers programme.
Donations were received for Birnam Arts Costume Fund.
Perth & Kinross Council provided grants for the Royal National Mod Fringe.
National Lottery provided grants for the volunteer management programme.
Arnold Clark provided grants for Free Film Fridays.
SSE provided a grant to commission an energy feasibility study to improve Birnam Arts' heating and energy efficiency.
Turcan Connell on behalf of The Hugh Fraser Foundation provided a grant to support traditional music classes.
Perth & Kinross Council provided a grant towards the Every Woman Cafe project.
Ross & Liddell provided a grant for additional support for those in the community.
The Seed Fund provided a grant towards the Open Mic Night.
Engage awarded a grant for "The Play in the Making".
CO-OP provided a grant for the volunteer programme.
Gender Equality provided grant funding to run three creative workshops for young people identifying as part of LGBTQ+ community or are exploring their identity.
Perth & Kinross Council award a grant towards creating a warm space with free films and food.
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.
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
In 2025 the following transactions took place between the Charity and its wholly owned subsidiary Birnam I Limited:
The Charity charged £20,568 (2024: £20,568) of rent for the sales shop and cafe occupied by Birnam I Limited.
The Charity charged £200,514 (2024 : £185,203) of employment costs to Birnam I Limited (see note 15).
At the reporting date, an outstanding loan balance of £280,293 (2024: £269,577) was due to the Charity from Birnam I Limited; this balance is interest-free and repayable on demand.