Contact: Bevis Ingram, ext 7508, email [email protected]

1. Summary

1.1 The following decision is sought:

· That the accounts of the Museums Trusts for 2004/05, as set out in Appendix 1 of the attached report, are approved.

2. Reason (s)

2.1 Annual approval of the accounts of the Trusts is required and the Executive Member for Recreation and Heritage acts as Trustee for the following:

· the Allen and Curtis Museum Foundation

· the Red House Foundation

· the Flora Twort Trust

· the Tasker Trust (no financial transactions).

2.2 In addition Mr Mark Breedon is a Trustee for the Allen and Curtis Museum Foundation. He has been sent a copy of this report.

2.3 The Museums Trusts support the work of individual Museums within the Museums Service. In doing so they support Hampshire County Council's corporate strategy insofar as the Museums Service's work supports the corporate strategy.

3. Other options considered and rejected

3.1 Not applicable.

4. Conflicts of interest declared by the decision maker or a member or officer consulted

4.1 None.

5. Dispensation granted by the Standards Committee

5.1 Not applicable.

6. Reason(s) for the matter being dealt with if urgent

6.1 Not applicable.

Approved by: (signature) Date: (date of decision)

................................. ...............................

Councillor Mrs M Snaith

Contact: Bevis Ingram, 01962 847508, email [email protected]

1. Introduction

1.1 The Executive Member for Recreation and Heritage acts as Trustee for the following:

· the Allen and Curtis Museum Foundation

· the Red House Foundation

· the Flora Twort Trust

· the Tasker Trust.

1.2 In addition Mr Mark Breedon is a Trustee for the Allen and Curtis Museum Foundation. He has been sent a copy of this report.

1.3 By law, the Trustees are required to approve the annual accounts of the Trusts, which must then be sent to the Charity Commissioners. The accounts for the year 2004/05 are attached at Appendix 1. These include the value of each Trust's investments at book cost. The recent market value of investments is shown, for information, in Appendix 2.

1.4 The various Trusts hold investments in a variety of managed funds, all geared to long term investment. These managed funds should spread risks, while giving access to professional investment management. The funds invested in have not been changed for a number of years, with the exception of the Allianz RCM UK Equity Fund, as the transaction costs of selling units and reinvesting in other funds, added to the uncertainty of not finding a "better" performing fund, all militate against change. Paragraph 2, below, indicates that the performance of the equity-based funds in 2004/05 was good for the second successive year. The trustees should continue to bear in mind the long-term nature of equity investment.

2. Management of the Investments

The Allen and Curtis Museum Foundation

2.1 The Foundation holds units in Charibond and Charifund.

2.2 Overall, the Allen and Curtis Foundation's income rose by £54, or just over 1.6% due to an increase in income from Charifund and higher interest on cash balances.

2.3 Charibond is a fixed interest based fund, investing in UK Government bonds (gilts) and corporate bonds. It should provide a higher income than funds such as Charifund which is invested in equities and convertible stocks. As an equity-based fund, Charifund should provide capital growth and rising income over the longer term.

2.4 Charibond's income distribution remained unchanged from 2003/04 at 7.6p per share. The capital value per Charibond share fell during 2004/05, by 0.7%, from 127.7p per share in 2003/04 to 126.8p. This compared with a fall of 0.7% in Charibond's benchmark, the FTSE British Government All Stocks Index. However, the capital value has risen 2.0% since then to 129.4p at 30 September 2005.

2.5 Charifund increased its income distribution from equities by 2.0%, from 56.2p per share in 2003/04 to 57.3p per share in 2004/05. The capital value of each Charifund share rose by 15.5% over the year, compared with a rise of 11.9% in the FTSE All Share Index. Charifund's portfolio is heavily weighted towards shares that provide a high income yield. Since March 2005 the Charifund holding has risen in value by a further 7.5%.

2.6 The higher income from interest on cash balances reflects the rise in average base rates between 2003/04 and 2004/05.

The Red House Foundation

2.7 The Red House Foundation's total income in 2004/05 rose by £1,576 or 59.5%, compared with 2003/04. The main sources of income are Charibond, Charinco and Allianz RCM which was converted from an accumulation stock to an income producing stock during 2003/04 and accounts for £1,522 of the increase during the year. The balance of the increased income for the year results from the higher interest earned on cash balances.

2.8 Charinco is another fixed interest fund. The distribution remained unchanged from 2003/04 at 10.0p per share. The capital value of each Charinco share fell by 0.4% compared with a fall of 0.7% in the FTSE British Government All Stocks Index. Since March the value of the Charinco holding has risen by 2.9%.

2.9 The Allianz RCM UK Equity Fund aims to provide healthy capital growth over the very long term. In 2004/05 the capital value per share rose by 11.0%. This rise in value was slightly less than the rise of 11.9% in the FTSE All Share Index. However, it performed less well than the Charifund holding held by the Allen Curtis Trust. Allianz pursue a more adventurous growth-based investment style, which they believe will outperform over the long term.

2.10 The Red House Foundation also holds smaller investments in three equity-based funds. The Aberdeen North American Unit Trust rose in capital value by 3.8%, the Aberdeen UK Growth Fund by 17.6% and the New Star Equity Trust Income units rose by 13.2%.

Flora Twort

2.11 The Trust's investments are held in Charibond and Charinco. As explained in the previous sections, income from Charibond and Charinco remained unchanged in 2004/05. However the Trust's income for 2004/05 rose by £10 due to an increase in interest earned on cash balances. The market value of the Trust's investments fell, by an overall figure of 0.6% during 2004/05 but has risen 2.5% in the six months to 30 September 2005.

Recommendation

That the Trustees approve the accounts as set out in Appendix 1.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1 Published works

2 Documents which disclose exempt or confidential information as defined in the Act