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2024-03-31-accounts

The Sheppard Trust

Annual Report and Financial Statements

31 March 2024

Company Limited by Guarantee Registration Number 6621820 (England and Wales)

Contents

Reports
Reference and administrative details 1
Report of the Board of Trustees 3
Independent auditor’s report 15
Financial Statements
Statement of financial activities 20
Balance sheet 22
Statement of cash flows 23
Principal accounting policies 24
Notes to the financial statements 30

The Sheppard Trust

Reference and administrative details Year to 31 March 2024

Board of Trustees Linda Davis, Chair
as at 30 September 2024 Martyn Carter
Amelia Gosal
Christina Jordan, Vice Chair
Keith Perry, Hon. Treasurer
Melanie Saunders
Claire Watson
Neil White
Agnes Woolrich
Chief Executive and Secretary Clare Scott Booth
Registered address 12 Lansdowne Walk
London
W11 3LN
Company registration number 6621820 (England and Wales)
Charity registration number 1133356
Auditor Buzzacott LLP
130 Wood Street
London
EC2V 6DL
Accountants JS2 Ltd
1 Crown Square
Woking
GU21 6HR
Investment Managers Investec Wealth and Investment Limited
2 Gresham Street
London
EC2V 7QN
Cazenove Capital
1 London Wall Place
London
EC2Y 5AU

The Sheppard Trust 1

Reference and administrative details Year to 31 March 2024

Principal Bankers Unity Trust Bank plc Nine Brindleyplace Birmingham B1 2HB Solicitors Trowers and Hamlins LLP 3 Bunhill Row London EC1Y 8YZ

The Sheppard Trust Tel: 020 7727 5500 Email: chiefexec@sheppardtrust.org www.sheppardtrust.org

The Sheppard Trust 2

Report of the Board of Trustees Year to 31 March 2024

The Board (previously known as the Executive Committee), whose members are the Directors and Trustees of the charity, is pleased to present its annual report together with the consolidated financial statements of The Sheppard Trust (the “Trust”) and its subsidiary ST Property Company Limited for the year ended 31 March 2024.

The report has been prepared in accordance with Part 8 of the Charities Act 2011 and constitutes a directors’ report for the purpose of company legislation.

The financial statements have been prepared in accordance with the accounting policies set out on pages 24 to 29 of the attached financial statements and comply with the charitable company’s Memorandum and Articles of Association, applicable laws and the requirements of 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 United Kingdom and Republic of Ireland (FRS 102).

OUR PURPOSES AND ACTIVITIES

Providing Homes

Maintaining Independence Community Spirit

The Sheppard Trust is an almshouse charity founded in 1855.

Its main charitable object is to provide low-cost housing for women who are in need, hardship or distress, who are aged 55 or over and who share community values. In practice the trustees normally accept applications from women aged 65 or over, in order to prioritise those most in need of the type of housing and support available.

The Trust’s main activity is providing housing, with some staff support, which enables our residents to live comfortably and independently in their own accommodation. For many years there has been accommodation for 29 older women in need of low-cost, comfortable and secure homes. Sheppard Trust residents have the security of knowing that their homes will remain affordable and well maintained, and that support is on hand when needed.

The Trust’s activities are underpinned by a strong set of values: that the residents should feel comfortable, warm and secure in their homes; that their independence, privacy and dignity should always be respected; that their homes, the utility services and safety systems should be maintained to a high standard; that they should be well-supported at times of ill health or other need; and that a mutually supportive community spirit should develop through a range of social activities. All the activities undertaken are informed by these values.

Priority is given to those in the greatest need and residents often come to us from insecure or unsettled accommodation. The majority of the residents receive housing benefit and other welfare benefits, and those who are ineligible for this support nevertheless have incomes and savings far from adequate to buy or privately rent a home in or near to London.

The Sheppard Trust 3

Report of the Board of Trustees Year to 31 March 2024

OUR PURPOSES AND ACTIVITIES (continued)

The Trust’s work contributes to reducing homelessness amongst older people, and reducing social care costs by helping residents remain independent and active. The trustees firmly believe that the provision of affordable housing for those in need is for the public benefit, and the Board confirms that in planning its activities it has had regard to the Charity Commission’s general guidance on public benefit.

ACHIEVEMENTS AND PERFORMANCE

Just before the start of the year the Trust entered into a sale and leaseback of its current properties. The focus for the year was maintaining secure and comfortable accommodation for the current residents and supporting them whilst planning for the move to temporary accommodation in 2024 (see Future Plans below).

We continued to provide a support service designed to maintain independent living. This includes:

The Trust’s work responds to the continued external changes in support for older people, along with increases in life expectancy. Older people are now being enabled to stay in their homes longer in life and the Trust is increasingly involved in working intensively with families, social services and other agencies to ensure our residents’ care and support needs can be met. Our current buildings remain increasingly constraining and we continued to encounter a number of physical difficulties in meeting the needs of individual residents, ranging from the steps and the bathroom facilities to sound and heat insulation issues.

During the year two residents moved to alternative accommodation in the area, in advance of our move. One moved to a care home, and one sadly died. We welcomed three new residents, all of whom were living in unsuitable accommodation for their needs. Our residents currently range between the ages of 68 and 87.

Residents continued to enjoy a programme of outings and events, including a Coronation party, a visit to Buckingham Palace, Christmas events, a trip to the ballet, as well as social events in the houses.

The Sheppard Trust 4

Report of the Board of Trustees Year to 31 March 2024

FUTURE PLANS

The Sheppard Trust has for some years been committed to an ambitious vision for a brand new, fit for purpose housing scheme, where its residents can enjoy excellent facilities and a home that meets their needs for life, and where it can double the number of beneficiaries. We continued to work towards realising this vision.

Housing for older people has never been more important and there is a huge need for good quality, affordable provision for those of limited means to buy or rent property. The Trust’s current properties have served their purpose well for many years in providing secure and comfortable homes, but the physical limitations of the current buildings are already restricting us and will not meet the needs for the next generation of older women.

The main issues we face in our current location are:

As explained in “Achievements and Performance” above, there are already situations in which these issues mean residents’ needs cannot be fully met to the high standards we aspire to.

As a result, the trustees concluded that continuing to maintain and attempting to upgrade these Victorian homes is not good value for money, as the potential for people to “age in place” is significantly limited, the age of the buildings means it is highly challenging to create homes with low maintenance and running costs, and the properties were unlikely to meet the aspirations of future generations of older people. Therefore for some years it has pursued a strategy to relocate the Trust to modern purpose built homes designed for the needs of older people and located in a more affordable area.

The vision is for housing which will enable residents to remain in their homes much longer in life and in most cases for the rest of their lives, and also to provide for a greater number of beneficiaries. Our vision also includes a tailored on-site support offer and access to care services to meet individual needs and a range of community activity giving choices for an active and fulfilling old age.

The Sheppard Trust 5

Report of the Board of Trustees Year to 31 March 2024

FUTURE PLANS (continued)

The Trust started its search for a suitable site in the Royal Borough of Kensington and Chelsea, where its current properties are located, but gradually widened the area of search over the past ten years as it became increasingly apparent that no suitable and affordable sites were viable prospects within the borough. Sites throughout the West London area and just outside were also considered. After this long search, the trustees announced in October 2018 that an agreement had been reached with the Royal Cambridge Home to purchase part of their site in East Molesey, near Hampton Court, subject to planning permission. The site is situated in a very pleasant residential area with access to shopping and leisure facilities and there is easy access to Central London in just over half an hour from Hampton Court station. There are mature trees on all sides and significant green spaces as well as easy level access to the Thames riverside with its walking paths and cafes.

Planning permission was granted in October 2021 for a scheme including 60 large one bedroom flats for the Sheppard Trust, which will house our current residents, women on our waiting list, and local women in need of low cost housing. There will be a range of communal facilities – a lounge, café, hairdressing/therapy room, physical activity room, meeting room and other useful spaces for meeting together. The housing will meet high modern standards in terms of space standards, future adaptability including wheelchair use and assistive technologies, sound and heat insulation, energy performance and security, based on the HAPPI standards which set out best practice for older people’s housing. It will have a residential character that promotes independence and avoids an institutional atmosphere.

A brand-new care home for the Royal Cambridge Home will be located on the remainder of the site. The two buildings, and the two charities, will be separate but will complement each other.

Work intensified on bringing this scheme to reality although challenges remain due to increasing construction costs and interest rates. Residents were involved in detailed design development, with workshops on the communal facilities, the apartments, interior design and the garden design. Construction started on the care home building on 3 April 2023 and completed after the year end on 29 July 2024. The Royal Cambridge Home then vacated their previous building and the land was transferred to the Sheppard Trust on 6 September 2024. On 17 September 2024 a building contract was completed for the new Sheppard Trust building and construction began.

The Trust disposed of the current properties in March 2023, in order to fund the new scheme. As part of the agreement, the Trust entered into a lease of the properties so that it could continue to occupy them for up to a further 23 months. All the proceeds net of sales costs will be reinvested into our new scheme.

This exciting development will enable us to offer homes which truly meet our residents’ needs into old age, enable us to offer homes for life in most cases, and double the number of beneficiaries that the Trust is able to help.

The development work is being undertaken by the Trust’s wholly owned subsidiary company, ST Property Company Limited. This is in order to ringfence the charity from some of the risks of entering into construction contracts and also for tax effectiveness. The company has entered into a deed of covenant so that all its profits will be gifted to the charity.

The Sheppard Trust 6

Report of the Board of Trustees Year to 31 March 2024

FUTURE PLANS (continued)

The Trustees had very much hoped to avoid the need for interim accommodation but as the sale agreement and building developments progressed it became apparent that this would be necessary. During the year the Trust consulted with residents on their priorities for interim accommodation, and used these to carry out a wide ranging search for suitable properties. After the year end a contract was entered into with Birchgrove Life for the Trust and the majority of its residents to move to Ayrton House, Mill Hill, whilst our new home at East Molesey is completed. At the time of signing this report, the move was in progress.

The Trustees appreciate the impact on our current residents and thank them for their patience. Our residents have been offered high quality interim accommodation and they will be guaranteed a brand new flat in our new scheme, but moving house, particularly at an advanced age, can be daunting and stressful. We will see to all the business of moving at no cost to our residents and support them through the whole process. We offered a package of support and assistance to residents who wished to remain close to our current location or to move elsewhere and a small number have taken this up or have moved to alternative interim accommodation which better met their needs and preferences.

Our continued objective is to safeguard the future of the Sheppard Trust by providing modern accommodation which meets its current and future residents’ needs for many years to come, as well as doubling the number of women in need who we are able to help.

FINANCIAL REVIEW

The financial results of the Trust were significantly influenced by the sale of the properties and leaseback arrangement with both income and expenditure increasing. The cash funds invested from the property sale generated significant investment income which supported the capital project budget. Expenditure increased because of the rent payable on Lansdowne Walk. There was a surplus for the year of £779,727 of which £465,233 is estimated to be due to the factors above. The Trust also benefitted from rises in interest rates. Maintenance expenditure fell as the move approached and because there had been major works in the previous year.

The Board of Trustees remains satisfied that the underlying financial position of the Trust is secure, and that it is well placed to maintain the present level of service and to plan for the future.

Review of business

The Trust’s income for the period under review, excluding the sale of property, increased from £680,679 to £2,010,718. The main reason for this was a very large increase in investment income due to the investment of the proceeds of sale of property and rising interest rates. There was also an inflationary increase in residents’ weekly maintenance contribution income. Expenditure increased from £822,445 to £1,388,385. This was primarily because the charity paid rent on its property after the sale, other expenditure decreased as less was spent on maintenance. In addition there was income and expenditure of £4,560,652 in the subsidiary trading company in relation to the building project.

The Sheppard Trust 7

Report of the Board of Trustees Year to 31 March 2024

FINANCIAL REVIEW (continued)

Review of business (continued)

There was a surplus of income over expenditure for the year of £590,956 (2023 – surplus of expenditure over income of £26,180,994). Gains on investments and actuarial losses resulted in a net increase in funds of £779,727 (2023 – increase of £26,003,688).

At 31 March 2023, the Trust’s total reserves amounted to £40,427,911 (2023 - £39,648,184). Of this, £15,935,278 (2023 - £15,203,045) related to special trust funds, which consist of investments and proceeds of sale of property endowed to the unincorporated charity. These proceeds of sale will be reinvested in new property which will be endowed to the unincorporated charity. The purposes of these funds are described in more detail on page 35.

Unrestricted reserves have increased from £24,445,139 to £24,492,632. It remains the Trust’s policy in due course to invest a very large part of its reserves in new housing for a greater number of beneficiaries.

Reserves policy

The Sheppard Trust holds reserves for three main purposes:

Once a beneficiary has been accepted, the Trust aims to support and enable her to stay in her home in the Trust’s property for as long as possible, and it therefore has a long term commitment to maintain its properties to a suitable standard and to support its beneficiaries.

The Board has concluded that a suitable level of ongoing free reserves for the first two purposes is c.£2.7m, taking into account their plans for a new property housing twice as many beneficiaries, and the preliminary operating budgets.

The Board intend to spend the reserves in excess of this on the proposed new accommodation, using any additional funds available to improve the facilities available to the residents or to increase the number of residential units available for beneficiaries. Currently reserves are already being used to fund the development of the scheme.

As at 31 March 2024 the general reserves stood at £24.5m. The trustees therefore consider that £2.7m of this should be held as ongoing reserves and the remainder of £21.8m is available to be spent on this exciting project, as well as the proceeds of sale of property held in the special trust funds. The trustees are keeping the levels of reserves under review as the project progresses.

The Sheppard Trust 8

Report of the Board of Trustees Year to 31 March 2024

FINANCIAL REVIEW (continued)

Reserves policy (continued)

The trustees invest the ongoing reserves in order to contribute to the Trust’s income and aim to match the liquidity of the investments to the predicted needs for cash. Reserves intended to be spent on the proposed new accommodation are held as cash, cash equivalents or in cash funds to reduce the risk of fluctuations in value.

Going concern

The Trust has relatively stable sources of income and a high level of capital and reserves and its main source of income has not been materially disrupted by external factors. Whilst economic uncertainty and inflationary pressures do affect the Trust, increased interest rates and maintenance charges mitigate this. The Board of Trustees are wholly confident that the Trust has adequate resources to continue in existence for the foreseeable future, being a period of at least twelve months after the date on which the report and financial statements are signed. For this reason it continues to adopt the going concern basis in the financial statements.

Investment policy

The general objectives of the Trust’s Investment Policy are to produce a reasonable level of income to help the Trust meet its commitments, and for the capital to grow over time at least in line with inflation.

The objectives are to be achieved by investing prudently and cautiously in a broad range of fixed interest securities and equities which are quoted by a recognised Investment Exchange, in Common Investment Funds and in unit trusts and open-ended investment companies which are authorised under the Financial Services and Markets Act 2000. Investments in derivatives are not permitted except with the written permission of the Board.

There are no ethical or geographical restrictions with regard to investment, but the Trust has confirmed with its investment managers that they should have regard to socially responsible investment issues when managing its portfolio.

The Trust has appointed Investec Wealth and Investment Ltd., who have confirmed that they are an authorised person within the meaning of the Financial Services and Markets Act 2000, as investment managers with delegated discretionary powers of investment. Investec reports on performance quarterly.

The portfolio is measured against a customised benchmark comprising: 15% Govt Bond Index, 35% FTSE All Share, 40% FTSE World ex UK, 5% IPD Index, 3% alternative assets and 2% prevailing cash rates. The Trust’s investment policy requires its investment managers to outperform the agreed benchmark by 1% p.a. over a rolling three year period. Over the 12 month period the portfolio underperformed the benchmark by 1.5% and over a three year period the portfolio underperformed the benchmark by 2.6%. The three year performance is still distorted by changes in investment strategy in and after 2019 in order to prioritise liquidity ready for future investment in new accommodation. The trustees are satisfied that the performance is on track after taking these factors into account.

The Sheppard Trust 9

Report of the Board of Trustees Year to 31 March 2024

FINANCIAL REVIEW (continued)

Principal funding sources

The Trust’s total income, excluding the property sale, for the year ending 31 March 2024 was:

2024
£		 % 2023
£		 %
Income from residents’ maintenance
contributions
Investment income
Donations and legacies		 537,682
1,470,888
2,148		 26%
74%
0%		 480,747

160,118

39,814		 71%
23%
6%
2,010,718 100%
680,679		 100%

Fundraising

The Trust is very grateful to the donors who supported our work during the year. They enabled us to provide additional support and services to our residents that might not otherwise be possible. The Trust is also grateful to those who support our work with a legacy. Legacy income is helping us to fund our future plans to help more beneficiaries in modern accommodation.

Donations (other than legacies) form a very small proportion of the Trust’s income (under 1%). There is a small group of regular donors giving either annually or more frequently. The main fundraising methods are writing occasionally to our supporters about our work, and placing legacy advertising in suitable journals. The Trust does not use any professional fundraisers or commercial participators. As the Trust is small and fundraising is a minor part of its activity, it has not yet signed up to any voluntary fundraising schemes or standards. The Trustees are not aware of any external fundraising carried out on the Trust’s behalf nor have they encouraged any.

No complaints were received about the Trust’s fundraising activity during the year. The Trust has taken steps to protect vulnerable people and others from unreasonable activity, persistent approaches or undue pressure to give. All our supporters are invited to express their contact preferences and contact is only made in accordance with these preferences. For most supporters this is a single letter and annual report once each year. We include clear contact details on all communications so that our supporters can raise any issues or change their contact preferences. We respect our supporters’ decisions including a decision to stop giving, with gratitude for their past support.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The Sheppard Trust is a company limited by guarantee (Company No. 6621820) and a charity registered with the Charity Commission in England and Wales registered charity (Charity No. 1133356). It was incorporated on 17 June 2008 and its governing documents are the Memorandum and Articles of Association.

The Sheppard Trust 10

Report of the Board of Trustees Year to 31 March 2024

STRUCTURE, GOVERNANCE AND MANAGEMENT (continued)

The charity has a linked subsidiary charity, also known as Sheppard Trust, governed by a scheme of 1932 as subsequently amended. The Charity Commission issued a uniting direction on 5 August 2010 to link it with the incorporated charity. The unincorporated charity remains a separate entity and subsidiary of the incorporated charity, with the trusteeship of the endowment fund being vested in the incorporated charity.

The charity owns the entire issued share capital of £1 in ST Property Company Limited, a company registered in England and Wales (Company Registration Number 09555468). The subsidiary was set up on 22 April 2015 and commenced trading on 1 April 2018. The company has been set up to carry out property development projects on behalf of the charity.

The charity’s Articles of Association stipulate that the Board of Trustees shall consist of not fewer than six or more than eleven trustees/directors and that at least four of the trustees/directors shall be female. When vacancies arise, the Board reviews the skills available to it through its members and recruits to fill identified gaps in knowledge or expertise. Normally trustees serve for no more than nine years, however due to the need for continuity at this crucial stage in the charity’s development plans, the Board has agreed to extend the terms of some trustees.

After the year end the Board of Trustees decided to cease using the name “Executive Committee” to describe itself, on the grounds that it did not properly describe the nonexecutive trustee body of a charity.

The following members of the Board of Trustees served during the period:

Appointed/Retired Linda Davis, Chair Martyn Carter Amelia Gosal Christina Jordan, Vice Chair Keith Perry, Hon Treasurer Melanie Saunders Claire Watson Neil White Agnes Woolrich

The Board takes responsibility for all strategic decisions and monitors the Trust’s performance throughout the year. The Board normally meets six times each year. It is supported by two sub-committees – Finance Committee, and Appointments and Wellbeing Committee. The Board delegates responsibility for the day-to-day operation of the Trust to the Chief Executive. A Project Control Group supports the Board with its strategic development plans.

The Sheppard Trust is a member of both the National Housing Federation and the National Association of Almshouses. The Trust has adopted the latter body’s ‘Standards of Almshouse Management, a Guide to Good Practice’.

The Trust is also a member of the National Council for Voluntary Organizations (NCVO) and the Charity Finance Group. Membership of all these bodies brings training opportunities and an awareness of developments and initiatives in other parts of the voluntary sector.

The Sheppard Trust 11

Report of the Board of Trustees Year to 31 March 2024

STRUCTURE, GOVERNANCE AND MANAGEMENT (continued)

None of the Trustees receives any remuneration from the charity. No related party transactions were reported, other than transactions with the charity’s subsidiary.

Key management personnel

The Trustees consider that they, together with the Chief Executive, are the key management personnel with authority and responsibility for planning, directing and controlling the activities of the charity. Running and operating the Trust on a day-to-day basis is delegated by the trustees to the Chief Executive.

The remuneration of the Chief Executive and other staff is reviewed annually by the Finance Committee on behalf of the Board, taking into account increases in average earnings and other relevant market information.

No members of the Board were remunerated for their services to the Trust during the year.

Risk management

The Board is responsible for the management of risks faced by the Trust and, through its Chief Executive, ensures that appropriate systems are maintained, that new risks are identified as they arise and appropriate controls established. The Board has established a risk policy and a register of key risks which focuses on high-impact risks and which is regularly updated and presented at each meeting. By managing risk effectively, we try to ensure that:

The systems of control operated by the Trust are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The key controls include detailed consideration by the Finance Committee of proposed budgets and regular management accounting information; agreed financial procedures defining, among other things, spending levels and which are regularly reviewed; regular review of the waiting list and resident welfare by the Appointments and Wellbeing Committee and regular review of health and safety compliance information by the Board.

The key risks currently facing the charity are

The Sheppard Trust 12

Report of the Board of Trustees Year to 31 March 2024

STRUCTURE, GOVERNANCE AND MANAGEMENT (continued)

Risk management (continued)

The Board has carried out a risk assessment specifically to identify the risks associated with the Trust’s development strategy. The main areas of risk include future construction costs, and government policy on revenue funding. There are also risks associated with economic uncertainty as a result of world events.

The Trust is addressing these risks by

The Board recognises that its systems provide reasonable, but not absolute, assurance that risks are being adequately managed, but believes that the major risks facing the Trust have been identified and that systems are in place to mitigate the effects of them.

STATEMENT OF THE BOARD’S RESPONSIBILITIES

The Board of Trustees (whose members are also the directors of The Sheppard Trust for the purposes of company law) is responsible for preparing the Board report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Board to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and the group and of the income and expenditure of the group for that period.

In preparing these financial statements, the Board is required to:

The Sheppard Trust 13

Report of the Board of Trustees Year to 31 March 2024

STATEMENT OF THE BOARD’S RESPONSIBILITIES (continued)

The Board is responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable it to ensure that the financial statements comply with the Companies Act 2006. It is also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement as to disclosure to our auditors

Each member of the Board confirms that:

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

The Report of the Board of Trustees has been prepared in accordance with the special provisions applicable to companies subject to the small companies’ regime.

Approved by the Board of Trustees and signed on its behalf by:

Linda Davis, Chair 30 September 2024

The Sheppard Trust 14

Independent auditor’s report Year to 31 March 2024

Independent auditor’s report to the members of The Sheppard Trust

Opinion

We have audited the financial statements of The Sheppard Trust (the ‘charitable parent company’) and its subsidiary (the ‘group’) for the year ended 31 March 2024 which comprise the consolidated statement of financial activities, the group and parent company balance sheets, the consolidated statement of cash flows, the principal accounting policies and the notes to the financial statements. 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 charitable company 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ 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 group and charitable parent company’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 trustees with respect to going concern are described in the relevant sections of this report.

The Sheppard Trust 15

Independent auditor’s report Year to 31 March 2024

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report and financial statements, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

The Sheppard Trust 16

Independent auditor’s report Year to 31 March 2024

Responsibilities of trustees

As explained more fully in the Executive Committees’ responsibilities statement, the trustees 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 trustees 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 trustees are responsible for assessing the charitable company’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 trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

The Sheppard Trust 17

Independent auditor’s report Year to 31 March 2024

Auditor’s responsibilities for the audit of the financial statements (continued)

We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

As a result of our procedures, we did not identify any key audit matters relating to irregularities.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

The Sheppard Trust 18

Independent auditor’s report Year to 31 March 2024

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. Our audit work has been undertaken so that we might state to the charitable company’s members 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 charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

4 October 2024

Edward Finch (Senior Statutory Auditor) For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

The Sheppard Trust 19

Consolidated statement of financial activities Year to 31 March 2024

(incorporating the income and expenditure account)

Notes
Unrestricted
funds
£		 Special
trust
funds
£		 Total
2024
£		 Total
2023
£
Income from:
Charitable activities
1
Investments and interest receivable
2
Donations and legacies
3
Other trading activities
Profit on disposal of tangible fixed assets
Total income
Expenditure on:
Charitable activities
4
Trading expenditure
Raising funds
5
Total expenditure
Net (expenditure) income before (losses) gains on
investment assets
Net investment gains (losses)
8,9
Net income (expenditure)
Other recognised gains and losses
Actuarial (losses) gains
14
Net movement in funds
Reconciliation of funds
Fund balances at 1 April 2023

Fund balances at 31 March 2024
537,682

739,666

2,148
4,560,652
—		 —
731,222
—
—
—		 537,682
1,470,888
2,148
4,560,652
—		 480,747
160,118
39,814
—
26,322,760
5,840,148 731,222 6,571,370 27,003,439

1,337,348
4,560,652

56,793		 25,621
—
—		 1,362,969
4,560,652
56,793		 797,029
—
25,416
5,954,793 25,621 5,980,414 822,445
(114,645)

189,088		 705,601
20,683		 590,956
209,771		 26,180,994
(182,306)
74,443

(21,000)		 726,284
—		 800,727
(21,000)		 25,998,688
5,000
53,443
24,445,139		 726,284
15,203,045		 779,727
39,648,184		 26,003,688
13,644,496
24,498,582 15,929,329 40,427,911 39,648,184

All trading activity is performed by ST Property Company Limited, a 100% subsidiary of The Sheppard Trust and a separate Charity SOFA is not produced. Details of ST Property Company results are in note 8.

The Sheppard Trust 20

Consolidated statement of financial activities Year to 31 March 2024

(incorporating the income and expenditure account)

Comparative statement of financial activities – year ended 31 March 2023

Notes
Unrestricte
d
funds
£		 Restricted
funds
£		 Special
trust
funds
£		 Total
2023
£		 Total
2022
£
Income from:
Charitable activities
1
Investments and interest receivable
2
Donations and legacies
3
Profit on disposal of tangible fixed assets,3

Total income

Expenditure on:
Charitable activities
4
Raising funds
5
Total expenditure
Net income (expenditure) before (losses) gains on
investment assets
Net investment (losses) gains
Net income (expenditure) before transfers between
funds
Transfer between funds
Net income (expenditure)

Other recognised gains and losses
Actuarial gains (losses)
14
Net movement in funds

Reconciliation of funds
Fund balances at 1 April 2022

Fund balances at 31 March 2023
480,747

154,280

39,814
12,315,528		 —
5,838
—
—		 —
—
—
14,007,232		 480,747
160,118
39,814
26,322,760		 459,070
95,741
11,607
—
12,990,369 5,838 14,007,232 27,003,439 566,418

752,795

25,416		 24,776
—		 19,458
—		 797,029
25,416		 746,447
27,542
778,211 24,776 19,458 822,445 773,989
12,212,158
(164,337)		 (18,938)
—		 13,987,774
(17,969)		 26,180,994
(182,306)		 (207,571)
85,251
12,047,821
692,376		 (18,938)
(692,376)		 13,969,805
—		 25,998,688
—		 (122,320)
—
12,740,197

5,000		 (711,314)
—		 13,969,805
—		 25,998,688
5,000		 (122,320)
(6,000)
12,745,197
11,699,942		 (711,314)
711,314		 13,969,805
1,233,240		 26,003,688
13,644,496		 (128,320)
13,772,816
24,445,139 — 15,203,045 39,648,184 13,644,496

The Sheppard Trust 21

Balance Sheets At 31 March 2024

Notes Group
2024
£
Charity
2024
£

Group
2023
£
Charity
2023
£
Fixed assets
Investments
8
Current assets
Debtors
10
Investments
9
Short term deposits
Cash at bank and in hand
Creditors: amounts falling due within
one year
11
Net current assets
Total assets less current liabilities
Provision for liabilities
Total net assets
The funds of the charity:
Funds and reserves
Unrestricted funds
. General fund
Special trust funds
12
2,641,684
2,641,685		 2,444,116
2,444,117
2,641,684
2,641,685		 2,444,116
2,444,117
12,621,054
22,991,000
1,313,355
2,398,714

12,917,363
22,991,000

1,313,355

2,321,309		 32,748,104
1,826,499
2,189,005
2,626,415		 32,961,251

1,826,499

2,189,005

2,621,382
39,324,122 39,543,027 39,390,023 39,598,137

**(1,499,895) **
**(1,426,381) **		 (2,159,955) (2,002,505)
37,824,227 38,116,646 37,230,068 37,595,632
40,465,911 40,758,331 39,674,184 40,039,749
(38,000)

(38,000)
 (26,000)
(26,000)
40,427,911 40,720,331 39,648,184 40,013,749
24,498,582
15,929,329



24,791,002
15,929,329		 24,445,139
15,203,045		 24,810,704
15,203,045
40,427,911 40,720,331 39,648,184 40,013,749

The accounts were approved by the Executive Committee on 30 September 2024 and signed on their behalf by:

Linda Davis, Chair

D Keith Perry, Treasurer

Clare Scott Booth, Chief Executive

The Sheppard Trust, Company Limited by Guarantee Registration Number 6621820 (England and Wales)

The Sheppard Trust 22

Consolidated statement of cash flows Year to 31 March 2024

Notes
2024
£		 2023
£
Cash flows from operating activities:
Net cash used in operating activities
A
Cash flows from investing activities:
Sale/(purchase) of fixed assets
Investment income
Decrease/(increase) in short term deposits
Proceeds from the disposal of investments
Purchase of investments

Net cash provided by (used in) investing activities

Change in cash and cash equivalents in the year
Cash and cash equivalents at 1 April 2022
Cash and cash equivalents at 31 March 2023
B		 18,578,059 (553,282)


—
1,470,888
875,650
2,433,357
**(23,554,305) **		 (45,635)
160,118
(675,847)
775,781
(573,331)
**(18,774,410) ** (358,914)
(196,351)
2,666,201		 (912,195)
3,578,396

2,469,850		 2,666,201

Notes to the statement of cash flows for the year to 31 March 2024.

A Reconciliation of net movement in funds to net cash used in operating activities

2024
£		 2023
£
Net movement in funds (as per the statement of financial activities)
Adjustments for:
Depreciation charge
Losses/(gains) on investments
Sale of fixed assets
Investment income
Decrease/(increase) in debtors
(Decrease)/increase in creditors
Increase/(decrease) in provision for pension liabilities
Net cash used in operating activities		 779,727
—
(209,770)
—
(1,470,888)
20,127,050
(660,060)
12,000		 26,003,688
54,113
182,305
(26,322,760)
(160,118)
(349,438)
54,928
(16,000)
18,578,059 (553,282)

B Analysis of cash and cash equivalents

B Analysis of cash and cash equivalents
2024
£		 2023
£
Cash at bank and in hand
Cash held by investment managers
Total cash and cash equivalents		 2,398,714
71,136		 2,626,415
39,786
2,469,850 2,666,201
At 31 March
2023
£		 Cash flows
£		 At 31 March
2024
£
Cash at bank and in hand
Cash held by investment managers
Total net cash(debt)		 2,626,415
39,786		 (227,701)
31,350		 2,398,714
71,136
2,666,201 (196,351) 2,469,850

The Sheppard Trust 23

Principal accounting policies Year to 31 March 2024

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the accounts are laid out below.

Basis of preparation

These financial statements have been prepared for the year to 31 March 2024. The financial statements are presented in sterling and are rounded to the nearest pound.

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these financial statements.

The financial statements have been prepared in accordance with 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 United Kingdom and Republic of Ireland (FRS 102) (Charities SORP FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), Companies Act 2006 and the Charities Act 2011.

The charity constitutes a public benefit entity as defined by FRS 102.

Basis of consolidation

The consolidated statement of financial activities and group balance sheet consolidate each reporting line of the financial statements of The Sheppard Trust and its subsidiary company, ST Property Company Limited, made up at the balance sheet date.

No separate statement of financial activities or statement of cash flows has been presented for the charity alone, as permitted by s408 of the Companies Act 2006 and the Charities SORP FRS 102. The charity had total income in the year of £2,067,591 (2023 - £27,003,439), total expenditure of £1,549,779 (2023 - £764,872) and net investment gain and actuarial losses of £188,770 (2023 - £177,306 losses) resulting in a net surplus of £706,582 (2023 – surplus of £26,061,261).

Critical accounting estimates and areas of judgement

Preparation of the financial statements requires the Executive Committee and management to make significant judgements and estimates.

The items in the financial statements where these judgements and estimates have been made include:

The Sheppard Trust 24

Principal accounting policies Year to 31 March 2024

Critical accounting estimates and areas of judgement (continued)

Assessment of going concern

The Executive Committee has assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The Executive Committee has made this assessment in respect to a period of one year from the date of approval of these financial statements.

The Executive Committee of the charity has concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The main form of financial risk faced by the charity is that of volatility in equity markets and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities and within particular sectors or sub sectors. The Executive Committee is of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due.

Income recognition

Income is recognised in the period in which the charity has entitlement to the income, the amount of income can be measured reliably and it is probable that the income will be received. Income comprises donations, legacies, investment income and residents’ maintenance contributions.

Donations received are recognised when the charity has confirmation of both the amount and settlement date. In the event of donations pledged but not received, the amount is accrued for where the receipt is considered probable. In the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that those conditions will be fulfilled in the reporting period.

Legacies are included in the statement of financial activities when the charity is entitled to the legacy, the executors have established that there are sufficient surplus assets in the estate to pay the legacy, and any conditions attached to the legacy are within the control of the charity.

The Sheppard Trust 25

Principal accounting policies Year to 31 March 2024

Income recognition (continued)

Entitlement is taken as the earlier of the date on which either: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor to the charity that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor’s intention to make a distribution. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, but the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material. In the event that the gift is in the form of an asset other than cash or a financial asset traded on a recognised stock exchange, recognition is subject to the value of the gift being reliably measurable with a degree of reasonable accuracy and the title of the asset having being transferred to the charity.

Dividends are recognised once the dividend has been declared and notification has been received of the dividend due. Dividend income is apportioned between funds in the ratio of the market value of the separate funds at the beginning of the accounting period.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

Income from residents’ maintenance contributions is credited on an accruals basis.

Expenditure recognition

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to make a payment to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

All expenditure is accounted for on an accruals basis. Expenditure comprises direct costs and support costs. All expenses, including support costs, are allocated or apportioned to the applicable expenditure headings. The classification between activities is as follows:

The charity makes grants to self-funded residents to support the payment of weekly maintenance contributions. These grants are recognised in full in the year they are awarded, unless the recipient has to fulfil performance conditions before the grant is released.

All expenditure is stated inclusive of irrecoverable VAT.

The Sheppard Trust 26

Principal accounting policies Year to 31 March 2024

Allocation of support and governance costs

Support costs represent indirect charitable expenditure. In order to carry out the primary purposes of the charity it is necessary to provide support in the form of personnel development, financial procedures, provision of office services and equipment and a suitable working environment.

Governance costs comprise the costs involving the public accountability of the charity (including audit costs) and costs in respect to its compliance with regulation and good practice.

Support costs and governance costs are apportioned on the basis of staff time.

Tangible fixed assets

Expenditure on furniture, computer equipment, fixtures and fittings is written off in the year in which it is incurred except in the case of amounts of a non-recurring nature in excess of £10,000. These are capitalised and depreciated on a straight-line basis over four years.

Listed investments

Listed investments held as non-current assets and current asset investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price.

Realised gains or losses on investment assets are calculated as the difference between disposal proceeds and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains or losses are calculated as the difference between the fair value at the year end and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Realised and unrealised investment gains (or losses) are combined in the statement of financial activities and are credited (or debited) in the year in which they arise.

Gains or losses are apportioned between funds in the ratio of the market value of separate funds at the beginning of the accounting period.

The Trustees monitor the underlying risks to which the investments are exposed by regular meetings and reviews with the investment managers. The risks to which the investments are exposed include market and credit risk. The exposure to market risk is mitigated by the Trust investing in a diverse portfolio of investments across various markets. Current asset investments are exposed to credit risk by this pooled fund being invested in short dated bonds and near cash investments. The risk is mitigated by the pooled fund being actively managed by the fund manager.

Debtors

Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material.

The Sheppard Trust 27

Principal accounting policies Year to 31 March 2024

Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition. Deposits for more than three months but less than one year have been disclosed as short term deposits. Cash placed on deposit for more than one year is disclosed as a fixed asset investment.

Creditors and provisions

Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provisions are recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

Subsidiary undertaking

The charity owns the entire issued share capital of £1 in ST Property Company Limited, a company registered in England and Wales (Company Registration Number 09555468). The subsidiary was set up on 22 April 2015.

The company was active from 1 April 2018. Results have been consolidated on a line by line basis.

Fund accounting

Restricted funds comprise monies raised for, or their use restricted to, a specific purpose, or contributions subject to donor imposed conditions.

Unrestricted funds represent those monies which are freely available for application towards achieving any charitable purpose that falls within the Trust’s charitable objects.

Designated funds comprise monies set aside out of unrestricted funds for specific future purposes or projects.

Special trust funds comprise monies for which the charity has responsibility in trustee capacity. Income from the endowment fund can be used for general purposes and is credited directly to unrestricted reserves, unless under the terms of the endowment such income must be used for specific purposes in which case it is credited to restricted funds.

The Sheppard Trust 28

Principal accounting policies Year to 31 March 2024

Pension contributions

The Trust participates in The Social Housing Pension Scheme (SHPS), a multi-employer pension plan which is funded and contracted out of the state scheme. Pension liabilities in respect of the defined benefits section of the Scheme are measured using the projected unit actuarial method and are discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability. Any increase in the present value of the liabilities within the charity’s defined benefit scheme expected to arise from employee service in the period is allocated to the respective expense category within the statement of financial activities. Actuarial gains and losses are recognised in the statement of financial activities as other recognised gains or losses.

Additional disclosures in relation to the pension plan are given in note 14.

Pension costs in respect of the defined contribution section of the plan are recognised when payable on an accruals basis.

Share capital

The company is limited by guarantee and has no share capital. Each member of the company guarantees to subscribe such amount as may be required for the purposes of the company, not exceeding £1 sterling.

The Sheppard Trust 29

Notes to the financial statements Year to 31 March 2024

1 Income from charitable activities

Income from charitable activities
Unrestricted funds
2024
£		 2023
£
Residents’ maintenance contributions 537,682 480,747
Income from investments Unrestricted
funds
£		 Restricted
funds
£		 Total
2024
£
UK listed investments
. Equities and unit trusts
. Fixed interest
Bank interest
2024 Total funds		 48,380
460,634
230,652		 —
731,222
—		 48,380
1,191,856
230,652
739,666 732,222 1,470,888
Unrestricted
funds
£		 Restricted
funds
£		 Total
2023
£
UK listed investments
. Equities and unit trusts
. Fixed interest
. Charities Property Fund
Bank interest
2023 Total funds		 41,734
6,910
4,747
100,889		 5,838
—
—
—		 47,572
6,910
4,747
100,889
154,280 5,838 160,118

2 Income from investments

3 Donations and legacies

Donations and legacies
Unrestricted funds
2024
£		 2023
£
Donations
Legacies		 2,148
—		 2,762
37,052
2,148 39,814

The Sheppard Trust 30

Notes to the financial statements Year to 31 March 2024

4 Expenditure on charitable activities

Expenditure on charitable activities
Direct
costs
£		 Support
costs
(note 6)
£		 Total
2024
£
Property expenditure:
. Service costs
. Repairs
. Management fees
. Professional and consultancy fees
Governance
Social expenditure
Grants to residents		 753,642
151,397
27,364
8,431		 320,312
64,347
—
—		 1,073,954
215,744
27,364
8,431
940,834
—
4,913
7,000		 384,659
25,563
—
—		 1,325,493
25,563
4,913
7,000
952,747 410,222 1,362,969
Direct
costs
£		 Support
costs
(note 6)
£		 Total
2023
£
Property expenditure:
. Service costs
. Repairs
. Property depreciation
. Professional and consultancy fees
Governance
Social expenditure
Grants to residents		 173,464
236,272
54,113
31,557		 109,543
149,206
—
—		 283,007
385,478
54,113
31,557
495,406
—
8,665
13,378		 258,749
20,831
—
—		 754,155
20,831
8,665
13,378
517,449 279,580 797,029

5 Costs of raising funds

Costs of raising funds
Unrestricted funds
2024
£
2023
£
52,697
18,253
4,096
7,593
56,793
27,542
2023
£
18,253
7,593
27,542
Investment management fees
Advertising costs

The Sheppard Trust 31

Notes to the financial statements Year to 31 March 2024

6 Support costs

Support costs
2024
£
234,255
25,942
123,822
1,000
22,720
2,483
410,222		 2023
£
Staff costs
Professional fees
General office costs
Pension interest costs
Governance costs
. Auditor’s remuneration
. Accounts preparation fees		 192,607
24,133
41,009
1,000
18,150
2,681
279,580

7 Staff costs

a) Executive Committee members and employees

Executive Committee members and employees
Total
2024
£		 Total
2023
£
Committee expenses
Travel expenses for 2 Committee members (2023 - 3)
Staff costs
Salaries
Social security costs
Pension costs		 1,676
233,737
20,424
23,962
278,123		 678
212,951
19,452
19,272
251,675
Staff costs have been allocated as follows: Total
2024
£		 Total
2023
£
Charitable activities
Support costs		 43,868
234,255
278,123		 59,068
192,607
251,675

b) Number of employees

The average number of employees expressed as full time equivalents was as follows:

2024
No.
3
1
4		 2023
No.
Management staff
Cleaners		 3
1
4

The number of employees earning over £60,000 in the year was as follows:

2024
No.
1		 2023
No.
£100,001- £110,000 1

The Sheppard Trust 32

Notes to the financial statements Year to 31 March 2024

7 Staff costs (continued)

c) Key management personnel

The key management personnel of the charity with authority for planning, directing and controlling the activities of the charity, and running and operating the charity on a day to day basis, comprise the Board of Trustees and the Chief Executive. The total cost of employment (including taxable benefits, employer's pension contributions and employer's national insurance contributions) of the key management personnel for the year was £131,810 (2023 - £125,845).

8 Investments

a) Listed investments

Listed investments
Group and charity 2024
£		 2023
£
At 1 April
Purchases at cost
Disposal proceeds
Accrued interest
Increase (decrease) in market value
Market value as at 31 March
Cash on deposit and dealing account
Total investments as at 31 March
Analysis by type – UK listed investments
. Equities and unit trusts
. Fixed interest
. Charities Property Fund
. Alternative assets
Cash on deposit and dealing account
Historical cost of the above		 2,404,330
561,393
(606,858)
1,912
209,771		 2,582,909
540,829
(525,781)
—
(193,627)
2,570,548 2,404,330
71,136 39,786
2,641,684 2,444,116
2,157,565
174,758
60,218
178,007		 2,055,654
203,749
104,767
40,160
2,570,548
71,136		 2,404,330
39,786
2,641,684 2,444,116
1,919,096 1,828,590

As at 31 March 2024, no individual investment holding represented a material amount of the total portfolio valuation. The largest single holding represented 6.59% of the total portfolio.

The Sheppard Trust 33

Notes to the financial statements Year to 31 March 2024

9 Investments

b) Investment in subsidiary undertaking

The charity owns the entire issued share capital of £1 in ST Property Company Limited, a company registered in England and Wales (Company Registration Number 09555468). The subsidiary was set up on 22 April 2015. The results of the subsidiary for the year ended 31 March 2024 are set out below.

2024
£
4,697,472
(4,560,652)
(63,675)
73,145
(365,567)
(292,422)		 2023
£
Turnover
Cost of sales
Operating expenses
Operating profit/(loss)
Loss brought forward
Retained loss		 —
—
(57,573)
(57,573)
(307,994)
(365,567)

At 31 March 2024, ST Property Company Limited had retained losses of £292,422 (2023 - £365,567) and called up share capital of £1 (2023 - £1). The results and balance sheet figures have been consolidated on a line by line basis within the accounts of The Sheppard Trust. The SOFA (page 20) excludes the management fee which is eliminated on consolidation.

10 Current asset investments

Current asset investments
Group and charity 2024
£		 2023
£
At 1 April
Withdrawal
Disposal
Interest re-invested
Increase (decrease) in market value
Market value at 31 March
Analysis by type – UK listed investments
. Equities and unit trusts
Historical cost of the above		 1,826,499
(1,826,499)
—
—		 2,032,675
(250,000)
32,502
11,322
1,826,499
1,826,499
1,669,951
—
—
—

Proceeds from the disposal of property in 2023 of £22,991,000 have been invested in short term liquidity funds.

The Sheppard Trust 34

Notes to the financial statements Year to 31 March 2024

10 Debtors

Debtors
Group
2024
£
—
4,568,013
60,997
3,523,217
—
492,797
76,030
3,900,000
—
12,621,054		 Charity
2024
£		 Group
2023
£		 Charity
2023
£
Legacies receivable
Accounts receivable
VAT recoverable
Prepayments – development costs
Due from subsidiary undertaking
Accrued income
Prepayments and other debtors
Amounts due from sale of property
- due in less than one year
- due in more than one year		 —
7,362
—
500,000
7,941,174
492,797
76,030
3,900,000
—		 115,945
12,492
33,665
2,570,884
—
8,262
62,061
26,044,795
3,900,000		 115,945
12,492
—
500,000
2,317,696
8,262
62,061
26,044,795
3,900,000
12,917,363 32,748,104 32,961,251

11 Creditors: amounts falling due within one year

Group
2024
£		 Charity
2024
£		 Group
2023
£		 Charity
2023
£
Accounts payable
Social security and taxation
Accruals
Social housing grant repayable		 108,942
5,449
67,456
1,318,048		 80,904
5,449
21,980
1,318,048		 6,320
—
835,587
1,318,048		 6,320
—
678,137
1,318,048
1,499,895 1,426,381 2,159,955 2,002,505

12 Special trust funds

Special trust funds
Group and charity At 1
April
2023
£
15,202,045
1,000
15,203,045		 Income
£		 Expenditure
£		 Gains
and
losses
£
20,683
—
20,683		 As at
31 March
2024
£
15,934,278
1,000
15,935,278
Special trust funds
Endowment fund
Restricted fund		 737,171
—		 (25,621)
—
737,171 (25,621)

Special trust funds

The Special Trust Funds are assets including investments endowed to the unincorporated charity which cannot be fully transferred. Assets which derive from the sale of properties previously held in the Special Trust Funds are retained in those funds to be spent on the purchase of future replacement property.

The Sheppard Trust 35

Notes to the financial statements Year to 31 March 2024

12 Special trust funds

Special trust funds (continued)

Group and charity At 1
April
2022
£		 Income
£		 Expenditure
£
(18,938)
(5,838)
(24,776)
(19,458)
—
(19,458)		 Gains
and
losses
£
(692,376)
—
(692,376)
(17,969)
—
_(17,969) _		 As at
31 March
2023
£

—
—
—
15,202,045
1,000
15,203,045
Restricted funds
Capital grant fund
Maintenance fund
Special trust funds
Endowment fund
Restricted fund		 711,314
—		 —
5,838
711,314 5,838
1,232,240
1,000		 14,007,232
—
1,233,240 14,007,232

13 Net assets between funds

Fund balances at 31 March 2024 are represented by:

Group Unrestricted
funds
£		 Special
trust
funds
£		 Total
2024
£
Investments
Net current assets
Provisions		 2,136,539
22,408,224
(38,000)		 505,144
15,430,134
—		 2,641,683
37,838,358
(38,000)
24,506,763 15,935,278 40,442,041
Charity Unrestricted
funds
£		 Special
trust
funds
£		 Total
2024
£
Investments
Net current assets
Provisions		 2,136,539
22,700,644
(38,000)		 505,144
15,430,134
—		 2,641,683
38,130,778
(38,000)
24,799,183 15,935,278 40,734,461
Group Unrestricted
funds
£		 Special
trust
funds
£		 Total
2023
£
Tangible fixed assets
Investments
Net current assets
Provisions		 1,959,655
18,890,775
(26,000)		 484,461
18,339,292
—		 2,444,116
37,230,067
(26,000)
20,824,430 18,823,753 39,648,183

The Sheppard Trust 36

Notes to the financial statements Year to 31 March 2024

13 Net assets between funds (continued)

Net assets between funds(continued)
Charity Unrestricted
funds
£		 Special
trust
funds
£		 Total
2023
£
Tangible fixed assets
Investments
Net current assets
Provisions		 1,959,656
22,877,048
(26,000)		 484,461
14,718,584
—		 2,444,117
37,595,632
(26,000)
24,810,704 15,203,045 40,013,749

14 Pension Scheme

From 1 October 2010, the Trust offers new joiners participation in the defined contribution section of the Social Housing Pension Scheme, having previously offered entry into the defined benefit section. The Trust closed the defined benefit section to new entrants at the same date.

Social Housing Pension Scheme (Defined Contribution)

This scheme is administered by The Pensions Trust and is a defined contribution scheme. The employer contribution rate payable by the Trust per annum is 6%.

Social Housing Pension Scheme (Defined Benefit)

The Trust participates in the scheme, a multi-employer scheme which provides benefits to some 500 non-associated employers. The scheme is a defined benefit scheme in the UK.

The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.

The last completed triennial valuation of the scheme for funding purposes was carried out as at 30 September 2020. This valuation revealed a deficit of £1,560m. A Recovery Plan has been put in place with the aim of removing this deficit by 31 March 2028.

The scheme is classified as a ‘last-man standing arrangement’. Therefore, the Trust is potentially liable for other participating employers’ obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.

The latest estimated employer debt on withdrawal from the scheme, being as at 30 September 2023, is £84,901 (30 September 2022 - £104,561).

For accounting purposes, a valuation of the scheme is carried out with an effective date of 30 September each year. The liability figures from this valuation are rolled forward for accounting year-ends from the following 31 March to 28 February inclusive.

The Sheppard Trust 37

Notes to the financial statements Year to 31 March 2024

14 Pension Scheme (continued)

Social Housing Pension Scheme (Defined Benefit) (continued)

The latest accounting valuation was carried out with an effective date of 30 September 2023. The liability figures from this valuation were rolled forward for accounting year-ends from the following 31 March 2023 to 28 February 2024 inclusive. The liabilities are compared, at the relevant accounting date, with the company’s fair share of the Scheme’s total assets to calculate the company’s net deficit or surplus.

Defined benefit liability

2024
£		 2023
£
Fair value of plan assets
Present value of defined benefit obligation
Deficit inplan recognised		 180,000
(218,000)		 110,000
(136,000)
(38,000) (26,000)
Year to
31 March
2024
£		 Year to
31 March
2023
£
Defined benefit obligation at start of period
Current service cost
Expenses
Interest expense
Contributions by plan participants
Actuarial gains due to scheme experience
Actuarial (gains) due to changes in demographic assumptions
Actuarial losses (gains) due to changes in financial assumptions
Benefits paid and expenses
Defined benefit obligation at end ofperiod		 136,000
—
2,000
6,000
—
94,000
(4,000)
4,000
(20,000)		 254,000
6,000
2,000
6,000
5,000
(35,000)
—
(32,000)
(70,000)
218,000 136,000
Year to
31 March
2024
£		 Year to
31 March
2023
£
Fair value of plan assets at start of period
Interest income
Experience (losses) on plan assets
Employer contributions
Member contributions
Benefits paid and expenses
Fair value ofplan assets at end ofperiod		 110,000
5,000
73,000
12,000
—
(20,000)		 212,000
5,000
(62,000)
20,000
5,000
(70,000)
180,000 110,000

The actual return on the plan assets (including any changes in share of assets) over the period ended 31 March 2024 was £78,000. (2023 – negative return of £57,000).

The Sheppard Trust 38

Notes to the financial statements Year to 31 March 2024

14 Pension Scheme (continued)

Social Housing Pension Scheme (Defined Benefit) (continued)

Year to
31 March
2024
£		 Year to
31 March
2023
£
Included in expenditure on charitable activities
Current service cost
Expenses
Net interest expense
Total expense		 —
2,000
1,000		 6,000
2,000
1,000
3,000 9,000
Year to
31 March
2024
£		 Year to
31 March
2023
£
Included in other recognised gains and losses
Experience (losses) on plan assets
Experience gains arising on the plan liabilities
Effects of changes in the demographic assumptions underlying the
present value of the defined benefit obligation
Effects of changes in the financial assumptions underlying the present
value of the defined benefit obligation
Totalgains(losses)		 73,000
(94,000)
4,000
(4,000)		 (62,000)
35,000
—
32,000
(21,000) 5,000

Assets

The charity’s share of assets held within the Scheme at 31 March 2024 are shown below. None of the fair values of the assets include any direct investments in the employer's own financial instruments or any property occupied by, or other assets used by, the employer.

2024
£		 2023
£
Absolute Return
Alternative Risk Premia
Cash
Credit Relative Value
Distressed Opportunities
Emerging Markets Debt
Global Equity
Infrastructure
Insurance-Linked Securities
Liability Driven Investment
Long Lease Property
Opportunistic Illiquid Credit
Private Debt
Property
Risk Sharing
Secured Income
Total assets		 7,000
6,000
4,000
6,000
6,000
2,000
18,000
18,000
1,000
74,000
1,000
7,000
7,000
7,000
11,000
5,000		 1,000
1,000
4,000
3,000
1,000
2,000
13,000
3,000
51,000
3,000
5,000
5,000
5,000
8,000
5,000
180,000 110,000

The Sheppard Trust 39

Notes to the financial statements Year to 31 March 2024

14 Pension Scheme (continued)

Social Housing Pension Scheme (Defined Benefit) (continued)

Key assumptions

Key assumptions
31 March
2024
%p.a.		 31 March
2023
%p.a.
Discount rate
Inflation (RPI)
Inflation (CPI)
Salary Growth
Allowance for commutation ofpension for cash at retirement		 4.80
3.27
2.67
3.67
75%		 4.93
3.16
2.48
3.48
75%
Life
expectancy
at age 65
Male retiring in 2024
Female retiring in 2024
Male retiring in 2044
Female retiringin 2044		 20.5
23.0
21.8
24.4

15 Trustees and indemnity insurance

The Trust has taken out a Directors and Officers Management Protection policy with RSA with a total cover of £1 million for any one claim.

16 Capital commitments and post balance sheet events

On 29 March 2023 The Sheppard Trust and ST Property Company Ltd entered into a Supplemental agreement with the Trustees of the Royal Cambridge Home, the effect of which was to vary a previous conditional agreement and to commit the Trust to the purchase of land owned by the Royal Cambridge Home. The Trust is now building its future new home on the land purchased. The capital commitment for the Sheppard Trust at 31 March 2024 (and at 31 March 2023) was to purchase the land in exchange for i) funding the construction of a new 32 bed care home for the Royal Cambridge Home, to be constructed by ST Property Company Ltd, and ii) a Fixed Land Payment. At 31 March 2024 (and at 31 March 2023) the capital commitment in respect of the Fixed Land Payment was £1,775,000. After the year end the Supplemental Agreement was amended by a Deed of Variation dated 8 July 2024, the effect of which was to reduce the Fixed Land Payment, and the final amount paid was £1,548,334.

On 29 March 2023 ST Property Company Ltd entered into a contract with Red Construction Group Ltd to construct the care home described above, for the sum of £8,117,941. Construction of the home commenced in April 2023 and was completed in July 2024.

On 6 September 2024 the Fixed Land Payment was paid and the transfer of land from the Royal Cambridge Home to the Sheppard Trust was completed.

The Sheppard Trust 40

Notes to the financial statements Year to 31 March 2024

16 Capital commitments and post balance sheet events (continued)

On 17 September 2024 ST Property Company Ltd entered into a contract with Red Construction Group Ltd to construct a housing scheme of 60 one bedroomed independent living apartments with associated communal facilities, for The Sheppard Trust, on the land purchased. The contract value was £21,825,960.

On 9 September 2024 The Sheppard Trust entered into an agreement with Birchgrove Life for provision of accommodation at Ayrton House, Mill Hill from September 2024 until the new housing scheme is complete, and on 10 September 2024 gave notice to terminate its lease of the Lansdowne Walk properties in January 2025. As at 30 September 2024 the Trust was in the process of moving residents and its operations to Ayrton House.

There were no other capital commitments or post balance sheet events.

17 Related party transactions

The charity owns the entire share capital in ST Property Company Limited (note 8b). During the year, the charity recharged costs of £56,872 (2023 - £54,934) to the company. At 31 March 2024, ST Property Company Limited owed the charity £7,941,174 (2023 - £2,317,696) relating to costs settled by the charity in order to support the company's cash flow needs.

Other than Executive Committee members expenses, as disclosed in note 7, there were no further related party transactions.

18 Operating lease commitments

At 31 March 2024 the group and charity had the following future minimum commitments in respect to non-cancellable operating leases:

Property Property
2024
£		 2023
£
Amounts due:
Within one year
Due in more than one year		 108,333
—		 650,000
108,333
108,333 758,333

The Sheppard Trust 41