BICMP_T_A_RESONANCE - Accounts
BICMP_T_A_RESONANCE - Accounts
The trustees present their annual report and financial statements for the year ended 31 August 2021.
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 Articles of Association, the Companies Act 2006 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)".
We are committed to the establishment of an outstanding, dynamic and meaningful learning experience, relevant to today’s and tomorrow’s music industry. We seek to transform students’ lives by empowering them to excel in their endeavours with confidence and integrity, determination and joy. We will do this by placing the student and their educational experience at the heart of everything we do. On graduating, our students will be admired and sought after for their musical skills, knowledge and understanding, experience, entrepreneurship and professionalism.
to establish and maintain a culture of excellence, innovation and enterprise in everything we do; to ensure that programmes of study are informed by the latest educational research and best pedagogical practice, relevant to the world of work, and fit for purpose in a rapidly changing world; to encourage all students and staff to be inquirers, critical-thinkers, communicators and risk-takers, as well as principled, open-minded, caring, balanced and reflective; to understand and support each and every student as an entire human being, paying due cognisance to their physical, cognitive and emotional needs; to cultivate an environment of respect for personal, social, religious and cultural differences; to deliver a programme of extra-curricular opportunities designed to broaden and develop an awareness of the wider world, other cultures and peoples; to recruit, support, develop and retain excellent teaching and operational staff; to engage with parents/guardians, alumni, industry partners, the local and international community, in supporting and developing the work of the Trust.
The Trust is committed to using its best endeavours and resources to ensure that all activities are governed by the principles of equal opportunity, whereby no person by reason of religious belief, political opinion, gender, marital status, race, colour, ethnic origin, sexual orientation or disability is treated less favourably or disadvantaged in any way. This statement applies to recruitment and admissions, to the curriculum, teaching and learning, staff development and training; in short, to every aspect of our work together.
The trustees review the aims, objectives and activities of the charity each year. This report looks at what the charity has achieved and the outcomes of its work in the reporting period. The trustees report the success of each key activity and the benefits the charity has brought to those groups of people that it is set up to help. The review also helps the trustees ensure the charity's aims, objectives and activities remained focused on its stated purposes.
The trustees have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the charity's aims and objectives and in planning its future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives that have been set.
students say that they value the teaching they are receiving, commenting that they are
a number have said that they are noticing a distinct difference in the style of teaching and learning to what they have experienced in schools and colleges. They understand that, at degree level, there is an expectation that learning becomes more autonomous. Whilst accepting that this is challenging, students again say they feel very well supported; all say that they feel incredibly fortunate to be in such a well-resourced facility commenting on the high quality of professional equipment and availability of spaces to rehearse and practice; all students say that they feel safe at Resonance.
safeguarding data protection and GDPR health & safety qualified teacher status – PGCE (HE) for our course leaders
Beneficiaries
As highlighted above, Covid has severely limited the scope of activities at Cable Plaza and those of Dudley Performing Arts Service. This has limited the range of opportunities available to students aged 18-21, although we hope this will improve in the coming months. The availability of extra space has however enabled Black Country Radio to provide a 24/7 broadcasting service.
The Trust’s financial performance is monitored monthly by the Board of Trustees. This is supported by quarterly meetings with our financial stakeholders, Dudley Metropolitan Borough Council, Unity Bank and NESTA.
Principal risks and uncertainties
Our principal risks and uncertainties are monitored by the Board of Trustees based on reports produced by the Trust’s Chief Executive and Treasurer. These include:
Financial management
Student recruitment and retention
Student and staff welfare
Student satisfaction
Government policy – financial and educational
Local issues such as economic development and regeneration
Plans for the future
Plans for the future include:
Diversification of the business model to facilitate additional sources of income
Apprenticeships – in addition to our degree offer
Music Hub status
Music Festival
Young Arts Programme
Partnership with Dudley College
UCAS registration
Saturday Music Centre
Short courses
Summer School
Conferences
The organisation is a charitable company limited by guarantee, incorporated on 1 August 2014 and registered as a charity on 8 January 2016.
The company was established under a Memorandum of Association which established the Objects and Powers of the charitable company and is governed under its Articles of Association.
The above listed trustees give their time voluntarily and receive no benefits from the charity. Any expenses reclaimed from the charity are set out in note 8 to the accounts.
The Board of Trustees meets monthly to review the following:
financial management, investments and borrowing
student recruitment and retention
student and staff welfare
student satisfaction
government policy – financial and educational
preparing and submitting annual reports and accounts
ensuring that funds and assets are used wisely to further its charitable aims
risk management and avoidance with regard to asset and property management, funds and reputation;
Day-to-day operations and teaching will be the responsibility of employed staff, reporting to the Chief Executive.
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:
Appointment of trustees
Trustees will serve a minimum term of three years, with a maximum term of no more than six years. Trustees will step down on a rotational basis to ensure continuity. All new trustee posts will be advertised in accordance with the Trust’s Equal Opportunities Policy. At the outset, it is our intention to recruit trustees with a broad range of skills and knowledge, which enhance and add value to the current professional team.
Succession planning will form part of the Trust’s risk management strategy and will include all non-executives (trustees), staff and key voluntary positions. Succession planning is a fundamental responsibility of the Board and is critical to the ongoing health and vitality of the Trust.
Trustee induction and training
All trustees will receive an annual induction course and regular training to ensure that they are fully aware of their legal obligations under the law. For internal purposes (for matters relating to students, staff and community activities) training will be provided by the Chief Executive and/or his/her appointed representative. Matters relating to employment law, finance, compliance, health & safety and other generic topics will be delivered by guest speakers.
All policies and procedures will be set out in the trustee handbook as recommended by the Charity Commission.
This will include:
effective meeting
strategic leadership
compliance
good governance
financial planning and management people
operational management communications managing change measuring impact
social investment
Related parties and relationships with other organisations
The Trust has worked with a number of organisations this year in order to achieve its targets and obligations. These include:
· Dudley New Heritage Company
· John Plumridge – property consultant
· Dudley Metropolitan Borough Council
· Wolverhampton Council
· Walsall Council
· Black Country LEP
· Unity Bank
· NESTA – community social impact
· Total Solutions Group – financial services and sponsor for Roadshow events
· Shark design – website and printed copy design
· The Musicians’ Union
· Industry partners – Roland, Marshall, Focusrite
· Neil Willies – insurance consultants
· Dudley College
In accordance with the company's articles, a resolution proposing that CK Audit be reappointed as auditor of the company will be put at a General Meeting.
The trustees' report was approved by the Board of Trustees.
The trustees, who are also the directors of BICMP T/A Resonance 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. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Opinion
We have audited the financial statements of BICMP T/A Resonance (the ‘charity’) for the year ended 31 August 2021 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.
Material uncertainty related to going concern
We draw attention to Note 1.2 in the financial statements, which indicates that the Trust incurred a net deficit of £459,181 during the year ended 31 August 2021 and, as of that date, the Trust’s current liabilities exceeded its total assets by £2,139,324. As stated in Note 1.2, these events or conditions, along with other matters as set forth in Note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the Trust’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The 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, except to the extent otherwise explicitly stated in our report, 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 for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and
the directors' report included within the trustees' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
we have not received all the information and explanations we require for our audit; or
the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the trustees' report and from the requirement to prepare a strategic report.
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.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified and assessed the risks of material misstatement of the financial statements, in respect of irregularities whether due to fraud or error, or non compliance with laws and regulations and then designed and performed audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company by discussion and enquiry with the directors and management team and our general knowledge and experience of the manufacturing and supply sector.
We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, employment, and health and safety legislation;
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, reviewing correspondence with relevant regulators and reviewing board minutes;
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed included but were not limited to:
Discussions with directors and management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
Confirming our understanding of controls by performing a walk through test or observation and enquiry;
Performing analytical procedures to identify any unusual or unexpected relationships;
Challenging assumptions and judgements made by management in its significant accounting estimates;
Identifying and testing journal entries;
Reviewing unusual or unexpected transactions; and
Agreeing the financial statement disclosures to underlying supporting documentation.
Owing 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. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members 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 charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
INCLUDING INCOME AND EXPENDITURE ACCOUNT
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
BICMP T/A Resonance is a charitable company limited by guarantee and is incorporated in the United Kingdom. The registered office address and principal place of business is Gardeners Cottage, Croome D'Abitot, Severn Stoke, Worcester, WR8 9DW.
The financial statements have been prepared in accordance with the charity's Articles of Association, the Companies Act 2006 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.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably.
Costs of raising funds relate to the costs incurred by the charity in inducing third parties to make voluntary contributions to it, as well as the cost of any activities with a fundraising purpose. This includes the costs associated with marketing the charity to its' potential future beneficiaries.
Expenditure on charitable activities includes the costs of delivering services undertaken to further the purposes of the charity and their associated support costs.
Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.
Governance costs are the costs associated with the governance arrangements of the charity. These costs are associated with constitutional and statutory requirements and include any costs associated with the strategic management of the charity's activities.
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
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 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.
Depreciation will start to be provided when the assets are bought in to use.
At each reporting end date, the charity 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).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Loans
Arrangement fees were paid up front at the start of the loan agreement and have been recognised as a prepayment to spread over the length of the loan. Interest is charged on a monthly basis during the interest- only period of the bank loan.
Local Authority Grants
Student Fees
Rental Income
Solent support
Rent and rates
Legal and professional fees
Bank charges
Loan interest
Insurance
Consultancy fees
Heat, light and power
Site security and maintenance
Printing, postage and telephone
Other expenses
Governance costs includes payments to the auditors of £4,200 (2020- £7,200) for audit fees.
R Benton, who resigned as a Trustee on 21st November 2020 received payroll-based remuneration totalling £45,505 during the year (2020: £0). Payments made are in accordance with the Articles of Association and represent payments for services conducted as a staff member.
The average monthly number of employees during the year was:
On 31 May 2018, a loan agreement was made between Dudley Metropolitan Borough Council and the charity as funding towards the purchase of the Cable Plaza building. Repayments for this loan will be paid over a period of 60 months. A further loan of £400,000 was drawn down in the year with Dudley Metropolitan Borough Council with repayments due to begin on 1st September 2022 for a period of 5 years (annual interest accruing at a rate of 3.5% above the base rate). DMBC have agreed a further 12 month capital repayment holiday up to 30 September 2023.
A loan agreement with Unity Trust Bank was taken out on 25 June 2018. Interest is charged at a rate of 3.25%. Repayments for the loan are made on an interest only basis until September 2023 following an agreed further 12-month delay on capital repayments made in the year. Servicing costs incurred are debited to the servicing account when payable.
The loan with Unity Trust Bank has been secured on the leasehold property, Cable Plaza, and guaranteed by Christopher Cronin and the Borough Council of Dudley (as is the overdraft facility held with Unity).
A loan is held with Arts Impact of £300,000. This loan is unsecured and interest is charged at a rate of 7% per annum. Repayments for the loan are on an interest only basis until June 2023 following an agreement to defer capital repayments for a further 12 months.
1 September 2019
1 September 2020
31 August 2021
All of this money (essentially grants) has been spent for the purposes intended, i.e. the conversion of Cable Plaza. The terms of the funds are as follows:
Upon disposal of the completed scheme if within five years subsequent to Practical Completion, the disposal price obtained (if long leasehold) or otherwise the market value of the scheme as assessed by an RICS Registered Valuer with a duty of care to WMBC shall be compared with the appraised market value (£2,875,000) and in the event that the achieved/assessed Market Value shall exceed the appraised market value, then 50% of the uplift in value shall be recoverable by WMBC, such clawback sum capped at the maximum sum (£2,875,000).
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:
A service charge is paid on a quarterly basis in advance, in relation to the 150 year leasehold of Cable Plaza building. The annual charge amounts to £66,000.