Despite the significant financial challenges addressed below, the organisation delivered a full programme of activity, with nearly 60,000 attendances in classes, performances and workshops and 235 individual artists benefitting from opportunities. Dance Base entered the 2023 financial year with a balanced budget and retained the majority of its reserves.
The organisation faced three major financial challenges in 2022. Suppressed demand for dance classes post COVID resulted in the loss of one third of the budgeted class income, energy bills increased by 250%, and inflationary pressures increased many other costs by 10% or more. Our main funders, Creative Scotland and City of Edinburgh Council, were not in a position to provide support as they had done during the pandemic.
As a result from autumn 2022 the board and executive implemented cost savings, staff reductions, and changes to the business model to drive increased income. Coupled with the diversion of Scottish Government Recovery Fund monies originally earmarked to bolster reserves, we reduced our unrestricted fund deficit to £84,683 and retained £104,695 of unrestricted reserves.
At the same time, with a difficult outlook for 2023 and beyond, the board and executive instigated a recovery plan, working with external consultants and our stakeholders to identify a long-term sustainable model for the organisation.
Former chair, Robert Dawson Scott, stood down in January 2023 and vice-chair, Jill Breingan, took the role of Acting Chair and managed a recruitment process for a new chair. We were appointed as co-Chairs for the organisation from September 2023.
We would like to pay tribute to Robert and Jill, along with the board and the executive team for the way that they have handled an extremely challenging period. We would particularly like to thank the members of staff who left us during 2022 as part of the necessary action required to deal with the challenges faced.
Dance Base is now in good financial shape and continues to deliver a full programme of activity supporting dance and dance artists that is valued by our users. We feel we have joined the organisation at a new chapter in its development and look forward to working with the board and leadership team to deliver an ambitious and sustainable long-term future for Dance Base.
The directors are pleased to present their report together with the financial statements of the charity for the year ended 31st March 2023. These are prepared to meet the requirements for a directors’ report and accounts for Companies Act purposes.
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 Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), 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 purposes of the charity are to:
Advance public education by the promotion and development of the arts, and in particular the art of dance in all its forms.
Further the appreciation of dance by the provision of classes, training, workshops and performances.
We have a vision of a Scotland where everyone has the opportunity to experience the benefits of engaging with dance, where dance artists are supported to achieve national and international success, and where Dance Base is celebrated as the epicentre of all things dance.
Our mission is threefold:
To ensure all Scotland’s dance artists have opportunities to develop successful careers at home and internationally, through investment and collaboration.
To build awareness of dance and its health and wellbeing benefits, and to enable as many people as possible across Scotland to experience these.
To attract support and resources by advocacy on the importance and benefits of the dance sector to funders and policy makers.
We have seven aims that together deliver this mission:
Build a sustainable dance ecology in Scotland that attracts and supports a wide diversity of dance artists to develop successful careers.
Develop an audience across Scotland eager to engage with a range of dance and to facilitate the supply of dance for them.
Support Scottish dance artists to connect and collaborate with their peers across the world.
Develop dance class provision that benefits participants from diverse groups and backgrounds and provides meaningful income for dance artists and Dance Base.
Promote across Scotland the use of dance to support physical and mental health and wellbeing, particularly in a post COVID context.
Ensure that Dance Base is an industry leader in equality, diversity and inclusion and environmental sustainability, and is supporting the development of best practice across the sector.
Build a reputation for Dance Base as an effective organisation, attracting people and organisations to support us and work with us.
We developed plans for the year under these three main areas of activity: a professional programme supporting dance artists, a public programme providing paid dance activity open to all, and a health, wellbeing and engagement programme supporting activity for specific groups delivering agreed benefits to mental and physical health and wellbeing.
Despite the significant financial challenges addressed above, we maintained delivery of almost all activity planned, and in particular prioritised delivery of all of the activity planned with artists, despite the potential to divert recovery fund money allocated for additional work with the sector into supporting the short-term financial health of the organisation.
In line with other cultural organisations, audiences (in our case dance class participants) were slow to return after COVID and as a result of the worsening economic conditions faced in the second half of the year. Although the size of the programme was close to what was planned, attendance levels were one third below targeted numbers for the year.
Professional programme
With support from the Recovery Fund for Cultural Organisations we were able to
continue to deliver an ambitious programme of activity that included:
A programme of funded and in-kind residency support for dance artists.
Our largest ever Edinburgh Festival Fringe performance programme featuring over 30 companies, 250 performances and reaching audiences of over 10,000.
Two scratch night performances offering new opportunities for artists to show work in progress to full audiences.
Further development of Love Dance Scotland partnership with Tramway, Work Room, Citymoves, Dance North and Scottish Dance Theatre to support artists’ ambitions.
International collaborations between artists and choreographers including with Taiwan, Lebanon and Senegal.
Public programme
We delivered a full pre-COVID programme of 100 classes in the summer term, but attendance levels were disappointing, over one third below what was expected and budgeted for. We took the decision to continue with a full programme in autumn to benefit from our new brand launch. Although attendance was better than the summer term, it remained considerably below target. For spring 23 term we reduced to 80 classes, removing those that were not performing financially or essential to our offer. Further improvement was noted, but not sufficient to ensure financial sustainability and a total new model has now been implemented (see below).
In total we recorded just over 50,000 attendances across the year.
Health, Wellbeing and Engagement programme
This area of activity is not core funded in the organisation, and we were successful in securing three-year funding from the Edinburgh Health and Social Care Partnership for the Head of Dance for Health and Wellbeing post, and eighteen-month funding from Scottish Power Foundation to support the maintenance and expansion of the Dance for Parkinson’s Scotland Network.
Other highlights include:
New work in Royal Edinburgh Hospital and Western General supporting long term physical recovery.
New work using dance supporting people living with dementia.
A new partnership with Grassmarket Community Project and Edinburgh Old Town Community Trust.
‘Winter warmers’ dance and social activity for older local residents.
In addition, supported by the Scottish Government Recovery Fund for Cultural Organisations, we were able to implement a rebrand project, refreshing the Dance Base identity for the first time in over twenty years, in order to drive increased awareness and income. This included:
A new website fully integrated into our class booking software.
A rebrand of the front of the building, entrance area and all signage to greatly increase ‘kerb appeal’.
A launch campaign using video advertising across central Edinburgh bus shelters.
The brand and the website were both silver award winners at the Scottish Design Awards 2023.
The Board acknowledges the financial support of its principal funders: Creative Scotland and the City of Edinburgh Council, and the many charitable trusts and foundations that have contributed to supporting our activities.
The principal funding sources were public programme income of £442,729 in 2023 (compared to £238,621 in 2022) rental income of £23,057 (£25,515 2022); local authority support of £50,000 and Creative Scotland regular funding of £408,333 (£408,333 2022). There is a commitment from Creative Scotland to extend their regular funding at the same cash amounts until March 2025, and from the City of Edinburgh to March 2024.
The organisation's aim has been to achieve a break-even position, or even a small surplus. The reality of this financial year, as outlined in the Chair's statement, meant that class income was £150,000 below target, energy bills rose by 250% and salary and other cost increases added an additional £50,000 of unbudgeted expense. Even with short term cost savings and repurposing of recovery funding earmarked to strengthen reserves, at the end of the year a call of £84,583 on unrestricted reserves was necessary.
The Balance Sheet at 31 March 2023 has total charity funds of £1,198,793 (2022 £1,563.133) which comprise £1,094,098 of restricted reserves (2022 £1,373,755) of which £1,018,545 (2022 £1,269,589) is in respect of the dance centre in the Grassmarket in Edinburgh which was originally funded in the majority by the Scottish Arts Council. Under the terms of the grant award, Scottish Arts Council had a standard security over the property that would allow the Arts Council to recover the property from the company in the event of an insolvent position arising. From 1st July 2010 this security has been transferred to Creative Scotland.
Unrestricted reserves total £104,695 (2022 £189,378) of which £3,923 is included as designated (2022 £3,923).
Investment Powers
Under the Memorandum and Articles of Association, the charity has the power to invest in any way the directors wish. Given the uncertainties of this year, all of the funds not immediately required are kept in interest bearing accounts with easy or short-term access.
The directors have a risk management strategy which comprises:
A quarterly review of the financial and operational risks the charity may face.
The use of a risk register maintained by the Executive Leadership Team to record risk, identify and monitor mitigation to minimise any potential impact.
The principal risks currently identified in six categories, which are listed below with their associated mitigation steps:
Financial
Mitigation steps: maintain strong relationships with funders; development of income generation strategy; strong budgeting and financial management; maximising income from the building and programme.
Human impact
Mitigation steps: clear and supportive line management; strategic consultation with freelance artists; maintain strong good communication with teachers; advocate for increased support for dance.
Strategic Direction
Mitigation steps: consult and collaborate with stakeholders in strategy development; regular inter-departmental strategy meetings; effective use of board and senior management team to monitor progress of strategic direction.
Governance
Mitigation steps: ensure compliance with UK Corporate governance Code; board training; rigorous selection and induction of trustees; regular skills audits; succession planning.
Systems and Processes
Mitigation steps: ensure staff training; ensure cyber security is undertaken and maintained.
Compliance
Mitigation steps: all policies and procedures reviewed by board on regular basis; maintain memberships of relevant bodies; professional and legal advice available to senior management.
As part of our recovery plans, we are implementing a one-year programme of activity that is based on the ambitions of the 2022 – 2026 Business Plan but adjusted for the current realities and the imperative to deliver a balanced budget for the 2023/24 financial year.
As of the time of writing (November 2023) principal activity delivered and planned includes:
Developing a sustainable business model
We have worked with external consultants and stakeholders to deliver a plan and roadmap to long term sustainability, that includes an action list agreed by the board in July 2023 and currently being implemented. As part of that we are in discussion with our core funders at Creative Scotland and City of Edinburgh Council about long term support levels from 2025 onwards.
Public class programme
We have designed and implemented a new model of public classes that maintains between 60 and 70 classes per week, where teachers hire studio space for a fixed fee, and Dance Base provides marketing and ticketing services for a share of the income. Results from the first two terms are extremely encouraging, increasing average teacher earnings and exceeding Dance Base targets, while releasing more building space for commercial hire.
Core support for dance artists
Activities include a programme of residencies and classes, as well as one to one support and surgeries.
Project based activity with dance artists
Activities include our PRIME elder company and LYDC Youth Company, both of which will benefit from new feeder groups to widen access.
Scotland, UK and International Partnerships
Activities include strengthened partnerships with Ireland and Germany, as well as continued collaboration across Scotland through the Love Dance Scotland network.
Live Performance
Our 2023 Fringe programme was able to continue through a partnership with Assembly Festival, who delivered a smaller programme than 2022 that was well received. We are continuing to deliver the ‘Scratch Night’ concept twice this year.
Health and Wellbeing
Activities include continuation and expansion of Dance for Parkinson’s classes and support for the Scotland network, further development of our activity in hospitals, and a developing partnership with Capital Theatres for dementia work.
Community Engagement
Activities include implementing the new partnership with the Grassmarket Community Project and Edinburgh Old Town Development Trust, as well as a developing relationship with Edinburgh Leisure in their venues.
As part of our long-term sustainability plans we have commissioned a ‘building passport’ which has identified the works required over the next 25 years to ensure the building remains fit for purposes, as well as work required to minimise building-related carbon emissions to meet our net zero targets.
Dance base Limited is a Scottish registered company limited by guarantee and governed by its Memorandum and Articles of Association
Reference and administrative details
Scottish Charity number: SC022512
Company registration number: SC145736
Registered Office
14- 16 Grassmarket, Edinburgh EHI 2JU (also Principal Office)
Auditors
Thomson Cooper Accountants, 3 Castle Court, Carnegie Campus, Dunfermline, KY11 8PB
Bankers
CAF Bank Ltd and Bank of Scotland
Solicitors
Dentons, 15 Lauriston Place, Edinburgh, EH3 9EP
Directors
The directors of the charitable company (the charity) are its trustees for the purpose of charity law. Throughout this report they are collectively referred to as the directors.
The directors serving during the year and since the year end were as follows:
Robert Dawson Scott (resigned 1 February 2023)
Jill Breingan
Lorna Finley
Joan Lopez Cleville
Cate Nelson-Shaw
Donald Simpson
Holly Wagner
Jane Mcfadzean
Councillor Donald Wilson (resigned 5 May 2022)
Ethelinda Lashley-Scott
Andrew Brownlie
Christine Devaney
Wendy Timmons
Councillor Val Walker (appointed 30 June 2022)
Paul Fitzpatrick (appointed 7 September 2023)
Alice McGrath (appointed 7 September 2023)
Chief Executive Officer:
Jim Hollington
Appointment of directors
New board members are recruited by a nominations committee through public advertisement; applicants are provided with a full pack of company information which includes the business plan, current and future budgets, staff information, Board responsibilities and the most recent audited accounts. The Nominations Committee of the Board is responsible for the process of recruitment and appointment, using a current audit of Board skills. The composition of the Board is a regular item on the Board agenda.
As set out in the Articles of Association, the Board has to appoint one or two of their members to be Chair / co-Chairs at such time and at such periods as they see fit. One director has to be appointed from the City of Edinburgh Council and up to 12 further elected directors. Elected directors are invited to serve an initial 3-year term of office. At the end of this term, they may be eligible for one further term. This may be extended for a restricted period and in specific circumstances at the Board's discretion.
Directors' induction and training
All new directors are invited to come and meet senior staff before their first Board meeting as part of their familiarisation and induction process. All directors are encouraged to attend appropriate external training events to assist in effective understanding and undertaking of their role.
Organisation
The Board of Directors administers the charity. The Board meets five times a year in person with a hybrid option for those unable to be present; a Finance and Audit Subcommittee is chaired by a specialist board member and meets in advance of all full board meetings; there are also informal meetings in specialist groupings covering various operational areas as required between formal meetings. A Chief Executive is appointed by the directors to manage the day-to-day operations of the charity. To facilitate effective operations, the Chief Executive has delegated authority, within terms of delegation approved by the directors, for operational matters including artistic programming, venue management, financial management and communications.
Pay policy
The directors consider that the board of directors and the senior management team comprise the key management personnel of the charity in charge of directing and controlling, running, and operating the organisation on a day-to-day basis. All directors give of their time freely and no director received remuneration in the year. Details of directors' expenses are disclosed in note 3 to the accounts.
Directors are guided by the annual change in the CPI and the current financial position of the organisation when determining staff remuneration. As a result, a flat pay rise of £2,000 was offered to all full-time staff this year, pro-rated for part time staff.
The directors, who also act as trustees for the charitable activities of Dance Base Limited are responsible for preparing the Directors' 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 directors 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 directors 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 directors 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.
Thomson Cooper were appointed as auditor to the company and a resolution proposing that they be re-appointed will be put at a General Meeting.
The directors' report was approved by the Board of Directors.
Opinion
We have audited the financial statements of Dance Base Limited (the ‘charity’) for the year ended 31 March 2023 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.
In auditing the financial statements, we have concluded that directors use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
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 directors 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.
We have nothing to report in respect of the following matters in relation to which the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:
the information given in the financial statements is inconsistent in any material respect with the directors' 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 directors' responsibilities, the directors 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 directors 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 directors 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 directors 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: existence and timing of recognition of income, posting of unusual journals along with complex transactions and non-compliance with laws and regulations. We discussed these risks with management, designed audit procedures to test the timing and existence of revenue, tested a sample of journals to confirm they were appropriate and inspected minutes from meetings held by management and trustees for any reference to breaches of laws and regulations. In addition, we reviewed areas of judgement for indicators of management bias to address these risks.
We identified areas of laws and regulations relevant to the Charity that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the officers and other management (as required by the auditing standards). We focused on specific laws and regulations which may have a direct material effect on the financial statements or operations of the charity,including the Charities and Trustee Investment (Scotland) Act 2005, regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended), employment laws and health and safety legislation.
We assessed the extent of compliance of the laws and regulations identified above by inspecting any legal correspondence and any correspondence from regulators and making enquiries of management.
We communicated identified laws and regulations and potential fraud risks throughout our team and remained alert to any indications of non-compliance or fraud throughout the audit. However the primary responsibility for the prevention and detection of fraud rests with the trustees. To address the risk of fraud we identified internal controls established to identify risk, performed analytical procedures to identify unusual movements, assessed any judgements and assumptions made in determining accounting estimates, reviewed journal entries for unusual transactions and identified related parties.
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. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations
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 and to the charity’s trustees, as a body, in accordance with Section 44(1) (c) of the Charities and Trustees Investment (Scotland) Act and 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.
Thomson Cooper 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.
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
Dance Base Limited is a private company limited by guarantee incorporated in Scotland. The registered office is 14-16 Grassmarket, Edinburgh, EH1 2JU.
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), the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "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.
Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note.
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 £.
In the year to 31 March 2023 the charity recorded a deficit of £364,340 of which £84,863 related to the unrestricted reserve. At the balance sheet date, the charity had net assets of £1,198,793 however £1,093,300 relates to fixed assets and restricted reserves with £66,507 available as free reserves.
During the year to March 2023, Dance Base faced significant cost pressures due to the energy crisis and wider price inflation in the UK economy. An increase in energy costs of over 250%, increases of around 10% in many other costs and a similar impact on staff costs, were compounded by a slower than expected rebound in income from the exit from COVID.
As a result, the Trustees and Senior Management team undertook a programme of restructuring to place the organisation on a balanced budget that could withstand the challenging economic environment. Operational costs were reduced and a new approach to the public programme removed a large portion of the risk attached to it to stem any further losses in this area. At the same time a, strategic review of Dance Base’s operating model was commissioned, and the recommendations adopted in June 2023.
The restructuring and review of the operational model allowed Dance Base to budget confidently for a break-even position for the year to March 2024. At the time of writing, we are in a position to forecast an operating surplus for the year and are able to meet all the charitys obligations as they fall due. This is for two reasons. The first being earned income, particularly for the public programme and building rental, is outperforming the initial budget and and the second is that cost control and risk reduction across the programme of activity continue to have a positive impact on the financial position. In the unlikely event that the charity is unable to meet its obligations the Trustees would sell its investment properties to provide additional cash flow.
Revised budgets for 2024/25, based on our performance to date in 2023, show a small operating surplus, which the Trustees believe to be realistic and achievable.
The Trustees have, and continue to take, all steps to mitigate risks to the charity, and the Trustees are aware that while there are still uncertainties facing the charity, there are significant opportunities.
Based on the current financial projections and opportunities, the Trustees are satisfied that the charity has sufficient sources of current and future funding for the company’s needs, and that it is therefore appropriate for the financial statements to be prepared on a going concern basis. The Trustees have considered a period of at least 12 months from the date of approval of the financial statements.
The Charity has various types of funds which require to be separately disclosed as follows:-
Unrestricted funds are funds which are expendable at the discretion of the Board in furtherance of the objects of the charity.
Designated funds are unrestricted funds which are either:-
earmarked by the directors to be used for a particular purpose in the future;
or arise where a fixed asset has initially been acquired using a restricted fund and on acquisition of the asset there are no remaining restrictions: a designated fund is created to reflect the book value of the asset.
Restricted funds are funds to account for situations where a donor requires that a donation can only be spent on a particular purpose or where funds have been raised for a specific purpose. Related expenditure is identified to the fund, together with a fair reflection of support costs.
In the statement of financial activities and accompanying notes restricted income funds have been further sub-divided into: capital and non capital. The former represents restricted funds provided for capital projects, with the latter category representing all other restricted funds of the charity.
Income from donations and legacies comprises: all incoming resources from grants that provide core funding or are of a general nature, donations, legacies and sponsorships. Grants which do not have particular service requirements are included within this category of income. Income is recognised at such time as there is entitlement, it is probable that the income will be received and the amount can be measured with sufficient reliability. Income is only deferred where:
The donor specifies that the grant or donation may only be expended in future accounting periods or conditions imposed by the donor which must be met before the charity has unconditional entitlement to the grant or donation have not been attained. In such circumstances income is credited to deferred income and accounted for as a liability.
Investment income comprises interest receivable on cash balances held in interest bearing deposits and rental income receivable from investment property.
Income from charitable activities comprises income received under contract or where entitlement to grant funding is subject to particular service requirements. Such income is recognised as earned as the related services are provided. Income in this category principally relates to charges for the provision of dance classes and to income in connection with the hire of the charity's studio facilities. Income is deferred when hire income is received in respect of a future period or charges are made in advance of the event or services to which they relate.
Sponsorship in Kind and Donated Services and Facilities
Donated professional services and donated facilities are recognised as income when Dance Base has control over the item, any conditions associated with the donated item have been met, the receipt of economic benefit from the use by Dance Base of the item is probable and that economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102) general volunteer time is not recognised in the accounts.
On receipt, donated professional services and donated facilities are recognised on the basis of the value of the gift to the company. The value is the amount that the company would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised as expenditure in the period of receipt.
Expenditure is recognised when a liability is incurred ie there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and it can be measured reliably. Contractual arrangements are recognised as goods or services are supplied.
Expenditure is classified under the following activity headings:
Expenditure on raising funds which is the expenditure incurred in attracting grants and donations.
Expenditure on charitable activities which is the expenditure associated with the various activities in furtherance of Dance Base's objectives including those support costs and costs relating to the governance of the charity apportioned to charitable activities.
Support Costs
Support costs are those costs incurred to facilitate an activity. Support costs have been differentiated between governance costs and other support costs. 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 relating to a specific activity are allocated directly to that activity. Where support costs relate to several activities they have been apportioned as set out in note 10.
Individual fixed assets costing £1,000 or more are capitalised at cost. Tangible fixed assets are stated at cost, less depreciation.
Tangible fixed assets are depreciated on a straight line basis over their estimated useful lives as follows:-
Investment property is measured initially at cost. Investment property is subsequently revalued to its fair value at each reporting date and any changes in fair value are recognised in the Statement of Financial Activities including Income and Expenditure Account. Depreciation is not provided on investment property.
Grants for the Purchase of Fixed Assets
Grants received by the Charity which are specifically for the purchase of fixed assets are recognised as incoming resources in the Statement of Financial Activities when receivable. The relevant fund in which the net book value of assets so acquired is reflected is then reduced over the economic life of the asset in line with its depreciation.
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).
This is cash and short term highly liquid investments with an original maturity date of three months or less.
The charity only has financial assets and financial liabilities that qualify as basic financial instruments. Basic financial instruments are initially measured at transaction value and subsequently measured at their settlement value.
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.
Rentals payable under operating leases, including any lease incentives received, are charged as an expense on a straight line basis over the term of the relevant lease.
Pensions
The pension costs charged in the financial statements represent the contribution payable by the company during the year.
Grants
The charity received funding from the undernoted bodies during the current and previous year which are considered to be government grants as defined in the Charities SORP (FRS102).
Creative Scotland - Revenue
Creative Scotland - Performing Arts Relief & Recovery Funds
The City of Edinburgh Council - Revenue
HMRC - Coronavirus Job Retention Scheme
Classes, workshops and show income
Grants
Venue hires
Miscellaneous income
Sponsorship
Programme activities
Premises costs
Marketing
Admin
Legal and professional fees
Telephone, stationery and computer costs
Interest and charges
Miscellaneous costs
Impairment of debtors
Salary costs have been allocated to activities on the basis of an estimate of the time spent by a particular member of staff on an activity. Other costs which cannot be directly allocated to a specific activity have been allocated to activities based on estimated usage.
The average monthly number of employees during the year was:
The trustees consider the Chief Executive and the Artistic director to be key personnel. Total remuneration (gross salary, employer's national insurance and employer's pension contributions) paid to key management personnel was £102,759 (2022 - £116,200).
Total payments made during the year in relation to redundancy pay was £24,403 (2022: £1,819). The payments are recognised as expenditure within the Statement of Financial Activities.
The company is a registered charity and accordingly is exempt from tax on income and gains falling within Section 505 of the Income and Corporation Taxes Act 1988 and section 252 of the Taxation Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects. Accordingly, no provision is considered necessary for taxation.
The company's freehold land and buildings consists entirely of the dance studios at 14-16 Grassmarket, Edinburgh. A small (approximately 3.5% by floor space) part of the building is leased to a third party. Charities SORP (FRS 102) (Update Bulletin 2 published 5 October 2018) requires mixed use property to be separated between investment property (note 15) and property held for operational use.
The company granted a security over its freehold land and buildings to the Scottish Arts Council in respect of all obligations undertaken in terms of the funding agreement between the company and SAC. From 1 July 2010 this security has been transferred to Creative Scotland.
A valuation was carried out by J&E Shepherd Chartered Surveyors on 20 July 2020. The value of the property at this date was £265,000. The directors considered the value at 31 March 2023 is not materially different to the valuation carried out in July 2020.
The estimated historical cost of the property is £155,664.
Deferred income is included in the financial statements as follows:
Deferred income comprises programme income relating to future events together with the element of grant funding which the donor has either specified must be pent in a future period or where the donor has imposed various conditions in relation to the grant which have not been attained as at the balance sheet date.
Purpose of Restricted Funds
PRIME - individual donations enabling the company's weekly class to be delivered throughout the year and the creation of new work with choreographers.
Everybody Dance Now - this represents funding received in the previous year towards a programme of work with young disabled dancers in Edinburgh.
Step in Time - this represents funding from the Nancie Massey Trust towards a programme of dance development in care homes in Edinburgh and Midlothian.
Great Feats - this represents funding from Creative Scotland and the Robertson Trust (plus several other trusts in the previous years) towards a programme of work with at-risk young people, encouraging them to adopt a creative, healthy and active lifestyle.
Lothian Youth Dance Company - a grant from the Ernest Hecht Charitable Foundation for four bursary places to be awarded to dancers from disadvantaged areas in the Lothians, as well as setting up a new Junior LYDC class.
Dance for Parkinson's Scotland - funding for a programme of dance for people with Parkinson's in
Edinburgh, Glasgow and eight other hubs across Scotland.
Dumfries & Galloway - a second-stage grant from the Holywood Trust to continue and consolidate a programme of youth dance in the region, spearheaded by the Cultured Mongrel dance company.
Sick Kids -this represents funding from the winding up of another dance charity towards a programme of support for children being discharged from hospital back to their homes in East Lothian.
Other - Gesture Exchange- a grant from the Scottish Refugee Council for a series of online classes aimed at refugees.
Wellbeing: Feel Like Dancing - a grant from Foundation Scotland under The Scottish Council for Voluntary Organisation's Wellbeing strand, this money was for a programme of online dance classes devised primarily for older people, both in home and in care settings, with secondary aims to deliver work for key workers and vulnerable families.
Foundation Scotland - a grant for essential upgrades to the broadband capacity and reach in the Grassmarket building, thus facilitating the live streaming of classes, performances and lectures from the venue.
British Council African Exchange Funds - a grant to support a programme of exchange activity between dance artists in Scotland and Senegal
Performing Arts Venues Relief Fund -The purpose of this fund was to support immediate and critical financial need in order for performing arts venues to remain solvent during the period of closure to the public and to plan for a sustainable return.
HMRC - Coronavirus Job Retention Scheme - A scheme set up by the Government to help fund wages if there is less or no work during the COVID-19 pandemic.
Fixed Asset - Land and Buildings (previously Grassmarket capital grants) this represents the Dance Studio and shop at Grassmarket Edinburgh.
Coorie in for Winter – a grant from City of Edinburgh Council to support free activity in warm spaces for older people.
CEC Community Grants - grants from City of Edinburgh Council for Sunday Sessions - community engagement sessions designed to welcome new communities into Dance Base and dance activities.
British Council - Lebanon Precipitate - a grant to support a programme of exchange activity between dance artists in Scotland and Senegal.
Sundancer – a fund supported by patrons that engages more people with dance.
Tonic Arts - Dance in Hospitals - funding from NHS Lothian Charity to support long term physical recovery.
Transfer between funds
Where, in relation to a restricted fund, the terms of the funding agreement are such that it allows for a contribution to support costs, this contribution is accounted for as a transfer between restricted and unrestricted funds.
These are unrestricted funds :
Incoming resources
Resources expended
Transfers
Incoming resources
Resources expended
Transfers
Purpose of Designated Funds
Digital Boost Grant - support to purchase IT hardware or software to increase business competitiveness from Scottish Government.
Future minimum rentals payable under non-cancellable operating leases in respect of various items of equipment are as follows:
The charity leases part of its building to a third party.
At 31 March 2023 the charity had capital commitments as follows:
The company operates a defined contribution pension scheme. The scheme and its assets are held by independent managers. The pension charge for the year represents contributions payable by the company to the fund and amounted to £11,137 (2022 - £9,731).
There were no disclosable related party transactions during the year (2022 - none). None of the directors of the charity received any remuneration during the year or in the previous year for acting in the capacity of director. No travel expenses pertaining to the year were refunded to the directors (2022 : £nil).
The charity had no debt during the year.