The trustees present their report and accounts 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 charitable company's memorandum and articles, 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)".
The charitable company's objects are to promote and encourage the arts, especially opera, plays, dramas, ballet and music, and the study of the arts.
The policies adopted in furtherance of these objects are to organise, promote, manage and conduct festivals of music, dramas and other entertainments in Orkney or elsewhere annually or at such longer intervals as the Company may determine, and there has been no change in these during the year.
The charity organises St Magnus International Festival, Orkney’s midsummer celebration of the arts. Founded in 1977, the Festival has become a significant event in the UK’s arts year and has gained a reputation for commissioning new work and for community involvement.
As one of the leading festivals in the UK, the prestigious St Magnus International Festival (the Festival), brings international orchestras, recitalists, theatre, dance, literature and the visual arts to the Orkney Islands for a week around midsummer and is renowned for its unique blend of world-class performance and community participation.
Founded in 1977 by the late Sir Peter Maxwell Davies, the Festival has developed from small beginnings to become one of the UK’s most innovative and highly regarded arts events whilst retaining its roots in the local community. The charity's vision is to enrich people’s lives through the arts. Its aims are to present and promote arts of the highest quality; to be creative and innovative in programming and presenting new work; to enable and support year-round activity in Orkney; to provide and add value to education in and through the arts; to attract, stimulate and retain audiences of all ages and backgrounds; to disseminate the charity’s work outwith Orkney and to be sustainable, artistically, managerially and financially.
The charity relies on raising funds each year to stage the Festival: from earned income, public bodies, private trusts, companies and individuals. The charity trades as St Magnus International Festival.
The Festival benefits from a skilled volunteer force significantly enhancing its capacity and skill set. Apart from paid staff all other roles including Front of House Manager, Floor Manager, Lighting Manager, etc. are filled by volunteers.
Our activity during the financial year 24/25 was dominated by high levels of financial uncertainty and the need to deal with changes to the timetables for announcements relating to Creative Scotland’s Multi-Year Funding review exercise.
The year was ultimately characterised by significant success. SMIF was awarded 100% of the £570k that we sought across three years within the MYF process. Our team succeeded in presenting a festival programme that was both financially successful and very well-received by audiences. This was achieved in spite of having to operate under the severest of budget constraints.
In spite of financial constraints, Festival 2025 comprised 36 events across 14 different venues. Notable visiting performers included two wonderful young pianists, the Resol string quartet, the Echo Choir and the return of violinist Fenella Humphreys. As always, local creative talent featured prominently too. A Johnsmas Foy was dedicated to Robert Rendall. New works by Gemma MacGregor and Harry Josephine Giles drew large and appreciative audiences. We were delighted too to have an Accordion Course running alongside the festival programme.
This year would have marked Sir Peter Maxwell Davies’ 90th birthday and his work was celebrated across the programme, perhaps most poignantly in a solo piano performance on his own piano at Sanday Community School.
We continued though to face significant challenges perhaps most prominently inflation and uncertainty as to funding. It’s to Orkney’s credit that it’s such an attractive destination. It’s placing real strain on our budgets though.
We continued though to face significant cost headwinds. It’s an effect that’s been somewhat exacerbated by our commitment to carbon reduction. The biggest contributor to reductions is lowering the number of flights that we use. As other methods of transport are slower, we’ve been incurring greater time and accommodation costs.
The Board was sorry to see both Ruth Harvey and Alison Miller step down. We wish to record our thanks to both for the significant contributions that they have made as Board members. Ruth and Alison have both made major contributions to the Festival in various ways, before their time as board members. We look forward to seeing them enjoy future programmes.
We were delighted to appoint two new directors with strong connections to the Festival and to Orkney’s wider cultural community. Fiona Ferguson and Gareth Flett were appointed at the AGM on 27 May 25. We look forward to their insights, engagement and support as we proceed with delivering the plans for the future that our funding success was based on.
The trustees also wish to record their appreciation for the support that the organisation receives from its employees; our volunteers; our various funders; performers and other support teams.
The charity had total incoming resources of £368,067. Resources expended during the year totalled £292,005. At the balance sheet date the charity's funds had a book value of £347,528.
It is the policy of the charitable company that unrestricted funds which have not been designated for a specific use should be maintained at a level equivalent to between three and six month’s expenditure. The trustees consider that reserves at this level will ensure that, in the event of a significant drop in funding, they will be able to continue the charitable company’s current activities while consideration is given to ways in which additional funds may be raised.
The trustees have assessed the major risks to which the charitable company is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
The charitable company is a company limited by guarantee and a registered Scottish charity managed by a volunteer board of trustees. It is governed by its memorandum and articles.
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:
Since March 2013 the charity has recruited trustees with a range of interests through an open advertisement process. Trustee nominations are agreed at the AGM. The trustees believe these systems allow for a successful mix by refreshing the board membership with an appropriate blend of skills and abilities to support the charity, and is balanced by the experience of those longer-serving trustees.
Some of the trustees are members of the company. In that capacity, those trustees guarantee to contribute an amount not exceeding £10 in the event of a winding up. None of the trustees have any beneficial interest in the company.
The Festival employs a part-time, freelance Festival Director, Alasdair Nicolson. The Festival Manager is the only full-time employee
The Festival has employed a year-round, part-time freelance bookkeeper, and a part-time freelance Box Office Manager.
Additional support has been provided in the following paid positions for part of the year only:
Producer (freelance)
Production Assistant (freelance)
Technical Manager (freelance)
In addition volunteers have provided support in a range of key areas without remuneration.
From time to time, trustees are also trustees or directors of other organisations with whom the charity transacts. Details of these transactions, which are conducted at arms' length, are provided in the notes to the accounts.
The trustees' report was approved by the Board of Trustees.
I report on the financial statements of the charitable company for the year ended 31 August 2025, which are set out on pages 5 to 16.
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.
My examination is carried out in accordance with Regulation 11 of the Charities Accounts (Scotland) Regulations 2006. An examination includes a review of the accounting records kept by the charity and a comparison of the financial statements presented with those records. It also includes consideration of any unusual items or disclosures in the financial statements, and seeking explanations from the trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit, and consequently I do not express an audit opinion on the view given by the financial statements.
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.
Donations and legacies
Charitable activities
Other trading activities
Investments
The statement of financial activities includes all gains and losses recognised in the year.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
St Magnus Festival is a private company limited by guarantee incorporated in Scotland. The registered office is 13 Albert Street, Kirkwall, Orkney, KW15 1HP.
The financial statements have been prepared in accordance with the charitable company's memorandum and articles, 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)". The charitable company is a Public Benefit Entity as defined by FRS 102.
The charitable company 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 charitable company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Donations, legacies and other forms of voluntary income are recognised as incoming resources in the Statement of Financial Activities (SOFA) when receivable, except in so far as they are incapable of financial measurement. The value of services provided by volunteers has not been included.
Grants, including grants for the purchase of fixed assets, are recognised in the SOFA in the year in which they are receivable. Grants relating to future accounting periods are deferred.
Incoming resources from services and from the sale of goods are included when receivable.
Membership subscriptions are recognised in the period they are receivable.
All expenditure is included on an accrual basis and is recognised when there is a legal or constructive obligation to pay for expenditure. The charitable company is VAT registered and all expenditure is shown exclusive of recoverable VAT.
Costs of generating funds comprise the costs associated with attracting voluntary income and the costs of fundraising events.
Charitable expenditure comprises those costs incurred in the delivery of the charity's activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.
Governance costs include those costs associated with meeting the constitutional and statutory requirements of the charity.
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation 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:
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
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 charitable company reviews the carrying amounts of its tangible and intangible 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 net realisable value. Stock includes merchandise for resale.
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 and deposits held at call with banks.
The charitable company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charitable company's balance sheet when the charitable company 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.
Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in net income/(expenditure) for the year.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the charitable company transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Basic financial liabilities, including creditors are initially recognised at transaction price. 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.
Financial liabilities are derecognised when the charitable company’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 charitable company 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 charitable company’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.
Donations and legacies
Grants receivable for core activities
Donations and legacies
Artists' fees
Artists' accommodation
Artists' travel expenses
Venue rents
Staging & sound
Freight costs
PR, brochures & publications
Sundry production costs
Freelance personnel
Commissions
Other costs
Governance costs
Governance costs includes payments of £2,400 (2024 - £5,250 for audit and accounts preparation fees) for independent examination fees and £808 (2024 - £742) for other services.
Mr A. Nicolson, trustee and Artistic Director, received remuneration of £47,045 (2024- £35,869) for director services. The charity incurred £4,201 (2024- £7,818) for travel and subsistence expenses incurred in the performance of the above services.
The remuneration paid by the charity to Mr Nicolson was at arms length, and within the terms of the contract for services and employment contract, respectively, as permitted by Article 65 of the charity's constitution.
None of the other trustees (or any persons connected with them) received any remuneration during the year, nor were they reimbursed for expenses incurred.
The average monthly number of employees during the year was:
The charity is exempt from corporation tax on its charitable activities.
The charitable company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charitable company 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.
Restricted funds are held for the following purposes:
Event Scotland - funding provided by Visit Scotland for various costs associated with the festival.
Stafford Trust - funding provided for new computer equipment. This was unspent at the year end date.
Gordon & Ena Baxter Foundation - funding provided for various sound equipment. A transfer was made to unrestricted funds in respect of capital expenditure of which no further restrictions apply.
At the reporting end date the charitable company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
There were no disclosable related party transactions during the year (2024 - none).