FINANCIAL REVIEW 

 

The Society’s budget aims to fund all its events (lectures, dinners, trips etc) and grants from its income, the two major streams of which are the dividend income and subscriptions, with the events expenditure offset by income. This budget omits the payment made during the year to the investment advisers which means that annually overall expenditure often exceeds income. This situation is under review by a Financial Strategy Group which has a broader remit to promote the future development of the Society. The Society’s financial position has been monitored regularly by the Council and in discussions with representatives of Investec Wealth and Investment, our investment advisers.

 

Dividend income from investments within the financial year amounted to £15,739, a return of 3.9%. The market value of the Society’s investments this year has increased by 10.8% to £443,869. Whilst the Society’s budget for the financial year had been developed to generate a surplus of £1,000, a more positive outcome was forthcoming enabling Council to set aside £3,750 in the Bicentenary Grant Fund over the year to support the bicentennial year celebrations in 2019.

 

Reserves policy

The Society’s reserves comprise an unrestricted fund derived from past benefactions and its annual subscriptions, including the proceeds from the sale of the Philosophical Hall to Leeds City Council in 1921. The fund increased in value over the years as income exceeded expenditure and the value of investments increased. Since the Society adopted its new constitution in 1997, Council’s aim in the medium term has been to fund its activities as described above and to sustain/increase the capital value of its investments whilst using all the annual dividend income to promote the in-year activities.  The Society’s income and expenditure do, however, vary from year to year depending on a number of factors. The Council therefore considers it prudent to hold liquid reserves in the Charities Deposit Fund and current bank account.

 

Investment policy

There are no restrictions in the Society’s Memorandum and Articles on the Society’s power to invest. The Council’s investment objectives are to maintain a level of dividend income sufficient to contribute substantially to the Society’s activities, while promoting the capital value of its invested assets over the long term. To this end, it is the Society’s normal practice to reinvest realised gains on its assets. The Council has delegated the management of its investments on a discretionary basis to Investec Wealth and Investment.

 

Risk management

1)            Income: The investment managers pursue an active investment policy to generate income on the Society’s behalf. The outcomes are regularly reviewed by the Trustees.

2)            Expenditure: Expenditure on individual events and grants usually represents a small part of total expenditure and risks are minimised by standard procedures for authorisation of all financial transactions. The potential risks at the Society’s events are considered as part of the planning for them, and appropriate steps are taken, including the arrangement of Public Liability insurance as necessary.

3)             The quality of the Society’s events and the outcome of grants that have been awarded are reviewed by the Trustees at their regular meetings so as to ensure that all the Society’s activities are of a high standard consonant with its Aims.

 

The Society has taken advantage of the small companies’ exemption in preparing this Directors’ Report.

 

Approved by the members of the Council on 10 November 2016 and signed on their behalf by C J Hatton (President) and J E Lydon (General Secretary)