THE_ELEMENTS_WORLD_THEATR - Accounts

The Trustees present their report and financial statements for the year ended 31 December 2018.

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 constitution, 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)” (as amended for accounting periods commencing from 1 January 2016).

The object of the Company shall be the advancement of education for the public benefit through the promotion of, and by encouraging participation in, the Arts.

The company seeks:

• To promote individual and collective creativity;

• To promote co-operation between artists of different cultural backgrounds, races and disciplines and the public;    

• To present high quality productions and arts projects in support of the stated object.

This year the report has been prepared by the directors of the company rather than the Artistic Director as, sadly, Henny Lee Gershuny, its founder and Artistic Director passed away suddenly and unexpectedly at the mid year. As a result further planned performances of Reflections of a Constant Monk by Lee and the Monk’s Mirrors ensemble of musicians had to be cancelled.

Honouring Lee’s Passing

Lee had a very beautiful funeral and ‘green burial’ at Binning Wood in East Lothian in early July with a small number of family and close friends in attendance.

In addition, in response to the desire among many for a larger celebration of her life and artistic contribution, the Board of the company decided to organise a major concert in her honour timed to coincide with what would have been her 80th birthday in May 2019. Besides showing the breadth of her work - with poetry, extracts from her plays, dance pieces and music commissioned by her - it would provide an opportunity for some of those who collaborated with Lee to perform pieces that were dear to them and for many more to come together to celebrate their connection with her and The Elements over nearly 30 years.

The Board of The Elements therefore set in motion the necessary steps for realising this goal. These included:

• Setting a provisional title for the event,

• Locating suitable premises,

• Appointing a Project Manager to marshal all the component elements and liaise with the board of the Company,

• Establishing an outline budget for the event.

By the end of December, 2018 Pete Baynes – a long-term collaborator of Lee’s – had been appointed as Project Manager and jointly, with members of the Board, various venues had been assessed and one selected. Work was also put in hand to update The Elements website about the event and a dedicated Facebook account opened to keep people informed of progress

Large numbers of past collaborators had also contacted Pete with suggestions as to what they would like to contribute to the evening’s programme.

Plans for Future Periods

In addition to organising the celebratory concert the directors also flagged up the importance of both safeguarding and promoting the artistic legacy of the company and in particular of its Artistic Director. Two further projects were therefore envisaged but with no clear timetable:

• Assembling an archive of papers and other materials on works created by Lee and the company for lodging in the National Library of Scotland

• Placing Lee’s creative output – her poetry, scripts of plays and papers on theatre - on the public record via some form of publication.

A deficit of £68 arose during the year (2017: £2,105 surplus), leaving reserves of £2,256 carried forward at the year end (2017 : £2,324).

Principal funding sources

Principal funding sources for the period under review were donations and box office receipts, both of which are unrestricted funding sources.

Reserves and going concern policy

The Board has set a target to maintain its reserves to a level equivalent to three months running costs for the organisation.

Reserves at 31 December 2018 have decreased to £2,256 (2017 : £2,324) and the directors remain confident that, with the company’s low underlying cost base and continuing support from patrons, that the charity has sufficient reserves to continue for the foreseeable future.

Investment policy and performance

Under the Memorandum and Articles of Association, the charity has the power to invest any money that the company does not immediately require in any investments, securities or properties. As there are few funds for long-term investment the directors, having regard to the liquidity requirements of operating the charity and to the reserves policy, have operated a policy of keeping available funds in an interest bearing bank account.

Risk Management Policy

The annual strategic review and forward planning event considers the risks to which the charity is exposed and identifies what needs to be in place to manage these risks throughout the year. The risks faced by the company fall into two categories, internal and external.

Internal risks are minimised by the implementation of procedures for authorisation of transactions and activities and to ensure consistent quality of delivery for all operational aspects of the company.

External risks relate largely to the sustainability of the company. These risks are minimised by the development of a strategic plan, which will allow for the diversification of funding and activities.

Any variation from the business plan has an associated risk assessment that is presented to the Board of directors.

Governing Document

The Elements World Theatre is a company limited by guarantee governed by its Memorandum and Articles of Association dated on 25 April 2005. It is registered as a charity with the Inland Revenue. The organisation is a charitable company limited by guarantee and has no share capital. In the event of the company being wound up members are required to contribute an amount not exceeding £1.

Recruitment and appointment of directors

The company has a Board of directors that are voted in from the membership and no person shall be admitted as a member of the company unless approved by the directors. The Board meets regularly to evaluate, monitor and plan the development of the organisation. Nominations to be a director are requested from the membership at the AGM. All directors must stand down at the AGM but are eligible for re-election. The nominations for election are put to the membership at the AGM and the full Board is thereby elected via an ordinary resolution. The number of directors must not be less than 3 but shall not be subject to any maximum, unless otherwise determined by a special resolution. In addition, the Board may appoint up to 4 Specialist Advisors in a non-voting capacity.

At their first meeting after the AGM the directors elect their office bearers for the coming year. The Board can appoint further directors at any time during the year. The Board discuss what skills are required when a position arises. A short list is created and prospective trustees are contacted. The Board also welcomes applications if they believe they would be a good addition to the charity.

On joining the Board trustees receive a pack containing information about the charity and their role. Support is offered by experienced Board members when needed.

Reference and Administrative Information

Charity number        SC022072

Company number        SC283766

Registered Office and    21 Walker Street

Operational address    Edinburgh

            EH3 7HX

Our Advisors                

Independent Examiner    Fiona Haro CA

         Thomson Cooper Accountants

         22 Stafford Street

         Edinburgh

EH3 7BD

Bankers         Royal Bank of Scotland plc

Edinburgh Portobello Branch

177 Portobello High Street

Edinburgh

EH15 1EU

Directors and Trustees Rodney Charles Stares (Secretary)

             Michael Thomas Borland

Ana Isabel Cabrera Montesinos

Evi Tsiligaridou (Resigned 30 April 2019)

Key management personnel

No salaries were paid in the year.

The Trustees, who are also the directors of The Elements World Theatre 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; 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 Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the Companies Act 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.

The Trustees' report was approved by the Board of Trustees.

I report on the financial statements of the charity for the year ended 31 December 2018, which are set out on pages 6 to 12.

The charity’s Trustees, who are also the directors of The Elements World Theatre for the purposes of company law, are responsible for the preparation of the financial statements in accordance with the terms of the Charities and Trustee Investments (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. The Trustees consider that the audit requirement of Regulation 10(1)(a) to (c) of the 2006 Accounts Regulations does not apply. It is my responsibility to examine the financial statements as required under section 44(1)(c) of the Act and to state whether particular matters have come to my attention.

My examination was carried out in accordance with Regulation 11 of the Charities Accounts (Scotland) Regulations 2006 (as amended). An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts and seeks 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 accounts.

In connection with my examination, no matter has come to my attention:

to keep accounting records in accordance with section 44(1) (a) of the 2005 Act and Regulation 4 of the 2006 Accounts Regulations; and

to prepare financial statements which accord with the accounting records and comply with Regulation 8 of the 2006 Accounts Regulations;

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.

The company is entitled to the exemption from the audit requirement contained in section 477 of the Companies Act 2006, for the year ended 31 December 2018.

The Trustees acknowledge their responsibilities for ensuring that the charity keeps accounting records which comply with section 386 of the Act and for preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of the financial year and of its incoming resources and application of resources, including its income and expenditure, for the financial year in accordance with the requirements of sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The Elements World Theatre is a private company limited by guarantee incorporated in Scotland. The registered office is 11 Learmonth Gardens, Edinburgh, EH4 1HB.

The financial statements have been prepared in accordance with the charity's [governing document], 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)” (as amended for accounting periods commencing from 1 January 2016). 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 £.

At the time of approving the financial statements, the Trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

• Unrestricted funds are funds that can be used in accordance with the objectives of the charity at the discretion of the directors.

• Designated funds are unrestricted funds set aside by the directors for specific future purposes or projects.

• Restricted funds are funds that can only be used for particular restricted purposes within the objectives of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

All incoming resources are included in the statement of financial activities when the charity is entitled to, and virtually certain to receive, the income and the amount can be quantified with reasonable accuracy.

For donations to be recognised the charity will have been notified of the amounts. If there are conditions attached to the donation and this requires a level of performance before entitlement can be obtained then income is deferred until those conditions are fully met or the fulfilment of those conditions is within the control of the charity and it is probable that they will be fulfilled.

Income from government and other grants, whether ‘capital grants or revenue grants’, are 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 and is not deferred. Where a grant is received for a specific purpose, it is included in restricted income and any unexpended portion carried forward as a restricted fund.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

Income from other trading activities includes income earned from fundraising events and trading activities to raise funds for the charity. Income is received in exchange for supplying goods and services in order to raise funds and is recognised when entitlement has occurred.

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Expenditure is recognised where there is a legal or constructive obligation to make payments to third parties, it is probable that the settlement will be required and the amount of the obligation can be measured reliably. All expenditure was incurred in carrying out charitable activity of the charity, including the costs of operating.

The charity and its wholly owned subsidiary are not registered for VAT and therefore all expenditure is recorded inclusive of VAT.

Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. Support costs include office costs, general administration, and governance costs and are incurred directly in support of expenditure on the objects of the charity. The bases on which support costs have been allocated are on a direct basis or as a proportion of time spent.

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 net income/(expenditure) for the year.

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).

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

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.

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.

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.

Performance fees

Rent

Insurance

Materials

Publicity

Office expenses

Travel & subsistence

Subscriptions

Depreciation

There were no disclosable related party transactions during the year (2017 - none).