Contact: Bevis Ingram, 01962 847508 e-mail: [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

· the Aldershot Military Historical 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 2005/06 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 remained largely unchanged over the years 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 2005/06 was good for the third 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 £93, or just over 2.8% due to an increase in income from Charifund.

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 2004/05 at 7.6p per share. The capital value per Charibond share rose during 2005/06, by 0.5%, from 126.8p per share in 2004/05 to 127.4p. This compared with a rise of 1.8% in Charibond's benchmark, the FTSE British Government All Stocks Index. However, the capital value has fallen 1.8% since then to 125.1p at 31 May 2006.

2.5 Charifund increased its income distribution from equities by 4.7%, from 57.3p per share in 2004/05 to 60.0p per share in 2005/06. The capital value of each Charifund share rose by 19.6% over the year, compared with a rise of 24.0% in the FTSE All Share Index. Charifund's portfolio is heavily weighted towards shares that provide a high income yield. Since March 2006 the Charifund holding has fallen in value by 5.2%.

The Red House Foundation

2.6 The Red House Foundation's total income in 2005/06 rose by £128 or 3.0%, compared with 2004/05. The main sources of income are Charibond, Charinco and Allianz RCM.

2.7 Charinco is another fixed interest fund. The distribution remained unchanged from 2004/05 at 10.0p per share. The capital value of each Charinco share rose by 0.2% compared with a rise of 1.8% in the FTSE British Government All Stocks Index. Since March the value of the Charinco holding has fallen by 2.2%.

2.8 The Allianz RCM UK Equity Fund aims to provide healthy capital growth over the very long term. In 2005/06 the capital value per share rose by 23.4%. This rise in value was slightly less than the rise of 24.0% in the FTSE All Share Index. However, it performed better 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.

2.9 The Red House Foundation also holds smaller investments in three equity-based funds. The Aberdeen American Unit Trust rose in capital value by 17.5%, the Aberdeen UK Growth Fund by 24.7% and the New Star Equity Trust Income units rose by 19.9%.

Flora Twort

2.10 The Trust's investments are held in Charibond and Charinco. As explained in the previous sections, income from Charibond and Charinco remained unchanged in 2005/06. The market value of the Trust's investments rose, by an overall figure of 0.3% during 2005/06 but has fallen 2.0% in the two months to 31 May 2006.

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

Title

Working papers