The Charities (Accounts and Reports) Regulations 2005

PART V NOTES TO THE ACCOUNTS

The information to be provided by way of notes to the accounts shall, insofar as not provided in the statement of accounts, be as follows:

(a) a description of the accounting policies adopted for the investment fund, particularly regarding the basis of valuation of investments, the recognition of dividend income or interest and the conversion of any amounts expressed in currency other than pounds sterling, and of the accounting assumptions made by them, including any material change in these, the reason for such change and its effect (if material) on the accounts;

(b) where the charity trustees have during the financial year in question entered into any transaction, agreement or arrangement, made for the purpose of minimising the risk of loss to the investment fund in consequence of fluctuations in interest rates or in the market value of securities or in the rates of foreign exchange, or entered into any other transaction in financial futures or options relating to shares, securities, foreign currency or into any other financial instrument the value of which is dependent on or derived from the price movements in one or more underlying assets, the nature of, and reason for, entering into that transaction, agreement or arrangement and the total value of, and the maximum extent of financial exposure as at the date of the balance sheet resulting from, that transaction, agreement or arrangement;

(c) a statement as to whether any remuneration or other benefits (together with the amount of such remuneration or, as the case may be, the monetary value of such benefits) has been paid or is payable to any person who is a charity trustee of the investment fund, or to any person to whom functions in relation to management of the investment fund has been delegated, or to any person connected with such a charity trustee or manager, directly or indirectly from the property of the investment fund or from the property of any institution or body corporate connected with the investment fund, and the name of that person;

(d) particulars of any transaction undertaken in the name of or on behalf of the investment fund in which any person referred to in sub-paragraph (c) above has a material interest;

(e) an analysis of the amount and date of any distribution in respect of income and accumulation shares or payment of interest to participating charities;

(f) a note of any adjustments made in the statement of total return to reflect the amount of income included in the creation or cancellation price of a unit or share in the investment fund;

(g) the name of any institution or body corporate connected with the investment fund, together with a description of the nature of the investment fund’s relationship with that institution or body corporate and of its activities, including, where material, its turnover and net profit or loss for the corresponding financial year of the institution or body corporate and any qualification expressed in an auditor’s report on its accounts;

(h) particulars of any loan or guarantee secured against any of the assets of the investment fund;

(i) an explanation of any amount entered in pursuance of paragraph 2(f)(i) of Part I of this Schedule (United Kingdom tax);

(j) an analysis of any entry in the balance sheet relating to:

(i) tangible fixed assets for use by the investment fund, according to the following categories—

(aa) freehold interests in land and buildings;

(bb) any other interest in land and buildings;

(cc) payments on account and assets in course of construction; and

(dd) plant, machinery, fixtures, fittings and equipment;

(ii) debtors, according to the following categories—

(aa) in the case of a common investment fund, amounts receivable in respect of property transferred to the investment fund;

(bb) amounts receivable in respect of securities sold;

(cc) accrued income; and

(dd) other debtors; and

(iii) creditors, according to the following categories—

(aa) in the case of a common investment fund, amounts payable in respect of property withdrawn from the investment fund;

(bb) amounts payable in respect of securities purchased;

(cc) accrued expenses; and

(dd) other creditors;

(k) in the case of a common investment fund, the following statements, made up to the date of the balance sheet, that is to say—

(i) a portfolio statement, specifying—

(aa) details of each investment held by or on behalf of the investment fund, including its market value at that date;

(bb) whether or not the investment in question is listed on a recognised stock exchange;

(cc) the category of each such investment, according to its geographical area or industrial sector;

(dd) where the investment fund invests in more than one class of assets, the market value at that date of each class of investment funds;

(ee) the percentage of net assets represented by each investment so held and by each category of investment specified under sub-paragraph (cc) above;

(ff) the percentage of investment assets represented by each class of investments specified under sub-paragraph (dd) above; and

(gg) an analysis of the credit rating of any interest-bearing securities held at that date, as may be required by the IMA SORP to be given;

(ii) a statement of major changes in the portfolio, specifying—

(aa) where the aggregate value of purchases or sales of a particular investment during the financial year in question exceeds 2 per cent of net assets at the beginning of that year, or, in the case of the first financial year of an investment fund, exceeds 2 per cent of the net assets at the end of that year, that value;

(bb) unless disclosed in pursuance of paragraph (aa) above, the value of the 20 largest purchases and sales of a particular investment during the financial year in question; and

(cc) the total cost of purchase and net proceeds from sales of investments during the financial year in question;

(iii) a statement of the number of shares issued as at the beginning of the year and as at the date of the balance sheet and the value of each income or accumulation share as at each of those dates, calculated by reference to the net asset value of the investment fund; and

(iv) a statement of the amount, if any, in the dividend equalisation reserve;

(l) in the case of a common deposit fund, details of sums deposited by participating charities as at the date of the balance sheet, divided into—

(i) sums repayable on demand; and

(ii) deposits with agreed maturity dates or periods of notice, divided into—

(aa) those repayable in not more than three months;

(bb) those repayable in more than three months but not more than one year;

(cc) those repayable in more than one year but not more than five years; and

(dd) those repayable in more than five years;

(m) in the case of a common deposit fund, details as at the date of the balance sheet of—

(i) sums placed on deposit, divided into—

(aa) sums repayable on demand; and

(bb) other deposits, indicating whether they are repayable in not more than 3 months, more than 3 months but not more than 1 year, more than 1 year but not more than 5 years or more than 5 years; and

(ii) investments other than deposits, analysed in accordance with sub-paragraph (k)(i) above;

(n) the following particulars of any contingent liability, that is to say, its amount or estimated amount, its legal nature and whether any valuable security has been provided by the investment fund in connection with that liability and, if so, what;

(o) particulars of any other financial commitments which have not been provided for and are relevant to assessment of the state of affairs of the investment fund;

(p) in the case of any amount required by any of the preceding sub-paragraphs (other than sub-paragraph (k)(i) and (ii)) to be disclosed, or the percentage of net assets represented by each category of investment required by sub-paragraph (k)(i)(ee) above to be disclosed, or the percentage of investment assets represented by each class of investment required by sub-paragraph (k)(i)(ff) above, to be disclosed, the corresponding amount or percentage for the financial year immediately preceding that to which the accounts relate;

(q) a statement as to whether or not the accounts have been prepared in accordance with any applicable accounting standards and statements of recommended practice and particulars of any material departure from those standards and practices and the reasons for such departure;

(r) where the charity trustees have exercised their powers under regulation 6(4)(b) above, a statement of their reasons for doing so; and

(s) any other information which is required by these Regulations to be disclosed in a note to the accounts or which may reasonably assist the user to understand the statement of accounts.