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• Report Narrative

  • What is the charity trying to achieve?

  • Review the charity's development, main activities and achievements.

  • Review the transactions and financial position of the charity explaining the important features.

  • Future Obligations

  • Statement of Risk Assessment

• Conclusion

The revised SORP and charities legislation sets out the details required in your annual report.

Your report will include the accounts, notes to the accounts and any examiners /auditors report relating to them. Charitable companies should ensure they include all the relevant information they are required to by the Companies Act 1985 and accounting standards. In addition trustees must include any additional information required by their governing document.

• Charity name and address and registered office, where appropriate 

• Charity registration number and company registration number, where appropriate

• Nature of governing document, (deed, charter, memorandum and articles etc.)

• Constitution, (company, unincorporated association, body of trustees etc.)

• Names of all the trustees/ directors serving during the year describing the method of appointment and giving details of any sub-committee members. Except for limited companies, the names can be omitted, with the permission of the Charity Commission, if the disclosure would place the individual in personal danger eg. victims of domestic violence. If disclosure is not made then the reason must be stated.

• Names and addresses of bankers, solicitors, accountants, auditors and other professional advisors.

• Details of any specific restrictions on the charities operation contained in the governing document.

• A summary of any specific powers of investment and the source of those powers eg. governing document.

• the organisational structure and,

• the assets held by or on behalf of the charity.

In this section you need to explain what your charity is about.

• Explain the objects.
• Summarise the policies set to help achieve those objects, eg investment or grant making policies.
• Detail any material changes in policies since the last report.
• Outline future plans for the charity.
• Briefly describe how the charity is organised.

• Describe the general progress of the charity and support this with statistical information.

• Give details of important events.

• Give details of the charity's dependence on unpaid volunteers or donations in kind where the latter could not be reflected in the accounts.

• Comment on the effectiveness of fundraising activities.

• Explain how the charity's funds are applied.

• Explain the purpose for which the assets are held.

• Explain how the financial position at the balance sheet date will affect the future commitments of the charity.

• Give reasons for any change in accounting policies.

• Give details about the performance of subsidiaries and associates.

• Explain the effect of any fixed asset revaluations.

• Give details of any individual or organisation on whom you are dependent for financial support.

• Give details of any significant events that have taken place between the balance sheet date and the date of signing the accounts.

• Give details of any specific projects undertaken , the total income and expenditure to date and the estimated cost and time of completion.

• State whether the investments held have been acquired in accordance with the trustees' available powers.

• Explain on a fund by fund basis how the available assets will fulfill any future obligations eg. can investments be sold to raise the necessary revenue.

• Review and explain the relationship between the charity and any connected charities, organisations or related party.

• Include a statement confirming that the major risks to which the charity is exposed , as identified by the trustees, have been reviewed and systems established to mitigate those risks.

As you can see there are quite a lot of areas to consider within the text of your annual report. Many organisations already produce quite detailed reports but for others the new requirements will seem very onerous. Charitable companies can combine the Annual Report with the Directors’ Report. They may, instead, choose to do a Directors Report which contains the basic requirements and produce amore detailed annual review which does not form part of the statutory accounts.