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2021-03-31-accounts

THE PILGRIMS FRIEND GROUP

Group Financial Statements For the year ended 31 March 2021

COMPANY NUMBER 07169875 CHARITY NUMBER 1134979

Contents of the financial statements

Page

1 - 8 Trustees’ report

9 Consolidated statement of financial activities 10 Consolidated balance sheet 11 Company balance sheet

12 Consolidated statement of cash flows 13 - 31 Notes to the financial statements 32 Statutory information 33 - 35 Independent auditor’s report

Trustees’ report

The trustees present their report, together with the financial statements of the group for the year ended 31 March 2021. The trustees' report incorporates the directors’ report and the strategic report prepared for the purposes of company law. The statutory information is listed on page 32.

MISSION REVIEW

At the end of the review of 2019/20, we mentioned that the Covid-19 pandemic had just taken hold in the UK with “lockdown” being advised to the nation on 23 March 2020.

It has been an extremely challenging year. It is impossible to describe the year accurately using statistics as until the summer the testing available to all care homes was inadequate and we were only able to identify people as having the virus when they became significantly unwell. Notwithstanding that the numbers undercount the reality of the situation, they illustrate the severity of the challenges we faced. Over half of our staff had to be absent from work at one time or another because of covid related reasons and just over 30% of our residents became ill or were tested positive with the virus. We estimate that 30 of the people living with us died because of covid in outbreaks in five of our homes.

There were many acts of selfless heroism shown by our staff colleagues for which this charity is profoundly grateful. Many others just kept on going when tired and under pressure and coped admirably with the new ways of working that we had to adopt, and the charity acknowledges the debt of gratitude owed to these people too.

The people who live with us were also a powerful witness to the reality of the Christian message that Jesus Christ has triumphed over death, evil and darkness. There were significant challenges and moments of loss and grief, but our homes and schemes have also been places where joy and hope have been evident as anyone looking at our Facebook feeds will have seen. Our managers have testified to the reality of the promises seen in the Bible, notably in Psalm 23, that God is with us as we walk through the Valley of the shadow of death. The object of the Charity is to advance the Christian faith and we have been able to do this throughout this pandemic as we have supported people in the most testing of times and we have been strengthened by the need to support each other and to make prayer more central to our work.

Throughout the pandemic we have been concerned about the mental wellbeing of our residents and their relatives. We have complied with government guidance but wherever possible, and particularly when people were towards the end of life, we did everything we could to facilitate meaningful and safe visits. We surveyed relatives in the summer of 2020, and we were pleased to learn that our efforts were recognised and very much appreciated.

The trustees have been briefed regularly on the risks of the pandemic and have reviewed the lessons learned. Key elements of our response that proved invaluable were:

Shortly after the year end, nearly all the people living with us had been vaccinated (98%). Around 81% of the workforce had been vaccinated, slightly higher than the 80% advised by SAGE (Scientific Advisory Group for Emergencies) to provide a minimum level of protection against outbreaks of the covid and we have in place a programme that makes sure that we know the reasons why people have declined, and we continue to encourage uptake. With very few new infections from March 21 we have moved into what we call our “recovery” phase – the virus is still the dominant theme, but we are also now consciously looking forward and picking up on some of the other work that was deprioritised while we were in crisis response mode.

Strengthening our organisation

Although the pandemic response has dominated this year, the charity was able to make some progress towards the goals that we believe will help us achieve our vision of fulfilled living for people in later life. The strategies we followed, and the progress made is as follows:

Page 1

The purpose of this strategy was originally to prepare the charity for the growth that will result from our plans to replace our old buildings with new facilities designed to better meet the needs of people who live with. This programme to renew our physical infrastructure over the next decade or so is known as our “Renewal Programme”.

But the pandemic has also highlighted that having a strong organisation is necessary to help us withstand shocks such as covid19.

During the year we have invested in our support teams and in our home and scheme operations, the key features bring:

Delivering High Quality Christian Care and support.

Before the pandemic struck, and after a long period of prayer and planning, the trustees committed the charity to the “Renewal Programme” designed to ensure that all our premises that have a long-term future are invested in so that they enable the delivery of excellent care and support and that our other premises are replaced by new buildings.

The first of our new build properties, Middlefields House in Chippenham, is on track to be delivered in line with our budget and plan to open in August/September 2021. This is quite extraordinary given the challenges of the pandemic period. Our new design and concept of family living in small, homely households joined to make and economically effective larger unit is highly consistent with what is now seen to be best practice to minimise infection risk. The pandemic has increased the urgency associated with the Renewal Programme as having well-designed space makes infection control easier.

During the year we also publicly welcomed Koinonia, a Christian home in Worthing, into the PFS family with the plan to work with its trustees to establish a new home, to the Renewal Programme design, in the South Coast area. This will allow us to replace the capacity we lost when we had to close our home in Brighton in 2019.

We were also pleased that during the year we were given 13 flats, known as Carey Gardens, previously managed by the Kirby Muxloe Free Church Housing Association and these will operate as a satellite site to the Pilgrim Gardens housing scheme at nearby Evington.

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Notwithstanding the pandemic we have been able to carry on with many of our planned investments in our other homes including completing the ground floor remodelling and refurbishment of our home in Haslemere; a significant dining room extension at our home in Walton on the Naze; room refurbishments and a major upgrade to the restaurant area at Strathclyde House; and improvements at our home in Wantage.

In terms of how we look after people, we have continued to extend The Way We Care, our bespoke care model which prioritises seeing the whole person, not just their physical needs, and creates communities in which they can flourish. Training has been significantly challenged by the pandemic by we have refreshed the training at our home in Tunbridge Wells and introduced the concept at our existing home in Chippenham, so we are ready for things to be operational when we start at Middlefields House.

Growing our impact

Our impact has been significant this year. We have seen thirty more deaths than usual and many more of the people living with us ill or worried about becoming ill. Being able to support people through this period has been immensely important and the following “impact factors” have been pivotal:

The evidence for our impact is the feedback from families and the feeds on our Facebook pages that are full of people sharing hope and joy in community together.

It is also important to remember the wider context, for all this year apart from the terrible early months when the NHS was prioritised over care homes and guidance was lagging and changing, care homes facilities (including our homes and schemes) were much safer and experienced fewer excess death than for older people living at home.

We have been prominent in Christian media in the year helping people understand matters to do with faith and care in older age in a pandemic. We have had significant interest in our new Grief and Loss booklet and our relaunched Dementia Information Pack, as well as our Brain and Soul Boosting workbooks and our now quarterly magazine. We launched a new website which made navigating our homes, schemes, and resources much easier, and our social media channels did an excellent job in offering a snapshot of life in our homes and schemes during a time when visiting was severely restricted.

Our support of Faith in Later Life has also been of significant benefit to older people. This charity is taking forward that our vision to see the Christian Faith advanced and older people supported in areas where we have no home on the ground. During the year this became fully operational as an independent charity and we were able to significantly reduce the work that we do through our restricted fund that preceded it.

Faith in Later Life has reached several million people with messages of encouragement and equipping through BBC local radio, Christian media, and some national players such as Talk Radio. It has been able to convene work on a national scale as it has become known as the place to go to access churches and Christian work amongst older people. It has been consulted by MPs on parliamentary groups concerned with older age; it has produced guidance for churches in partnership with the National Centre for post qualifying Social work that will be vital for any church project that wants to take referrals from the state under social prescribing or other policies; and perhaps most notably it was a founding partner of “Daily Hope” launched by the Archbishop of Canterbury to offer telephone Christian fellowship to older people unable to access church through the lockdowns via the internet. As at 31/3/21 Daily Hope had clocked up over 4 million minutes of listening time. On the ground the number of volunteers who associate with Faith on Later Life has grown strongly and now number close to 400. These “church champions” attend training via Zoom and have been active in reaching out to lonely people using post cards and other resources provided by Faith in Later Life. The feedback from Church Champions is catalogued in a database and this is starting to become good evidence of impact as people report friendships developing (reduced loneliness) and people coming to faith or having their faith re-kindled.

On average over the year at any one time we were caring for and supporting around 420 older people against a total maximum possible of 510 across all our facilities (including Strathclyde house and Kirby Muxloe flats).

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FINANCIAL REVIEW

This has been a challenging year because of the pandemic. The thirty pandemic related deaths, concentrated in five homes where we had an outbreak represented 13% of the people living with us. Further, there was an understandable reluctance of people to move into care when doing so meant a period of isolation and restricted visiting. These two factors explains why our occupancy has been around 8% lower than budgeted for most of the year. This represents c£800,000 of lost income.

Our costs have also increased because of PPE requirements and additional infection control procedures (arranging and facilitating visits, testing etc) but these have been offset by local authority infection control grants that totalled £0.7m.

The net result of the above is that we broke even from our trading operations before depreciation. This was a better outcome than we had feared in the early stages of the pandemic.

Overall, excluding planned investment in Middlefields, there was a cash outflow on necessary capital spend of £0.8m.

The rate at which occupancy recovers is key to the long-term impact of the pandemic. We have been pleased to see occupancy at Evington recovering well but needing 11 months after its outbreak before people started to move in. This shows that a home can recover from the reputational impact of an outbreak.

Apart from the usual temporary “blips” occupancy has recovered well during the year with the exception of Great Finborough (where a particularly severe outbreak has reduced occupancy to around 65%) and Peterborough where another bad outbreak in February 2021 has reduced occupancy to levels of under 40% that are only viable in the very short term.

Other significant matters

We took on an independent living complex, Carey Gardens, which is shown as a donation of £1.1m and results in an increase in assets owned by the Group. In order to fund the Middlefields home we liquidated our investment portfolio held at Rathbones (valued at £2.0m at the start of the year with a gain of £0.1m, and we sold some of the properties at Redbourne which has resulted in a loss of £0.1.m being recognised (some of this as realised losses on sales and some as a result of downward revaluations on the properties still held at the year end). We received £0.2m pursuant to an overage clause on the grant of planning to the new owners of the Wellesborough home site.

Overall Performance excluding Strathclyde House

The key measure of performance used in the charity’s management accounts is its earnings before interest, tax, depreciation amortisation and rent (EBITDAR).

EBITDAR for the year is reported as £1,435,000.

Excluding the gift of Carey Gardens, the net result is that the underlying EBITDAR excluding Strathclyde House was £365,000.

STATUTORY INFORMATION

Our objects and how we seek to fulfil them

The Pilgrims Friend Group is a non-trading charitable company which is the sole corporate member of Pilgrims' Friend Society, Pilgrim Homes and Pilgrim Homes Trust. In turn, Pilgrims’ Friend Society is the sole corporate member of Strathclyde House Trust. The governing document is the articles of association.

The Pilgrims Friend Group exists to research and understand the context for the delivery of Christian Care and it sets policies and provides direction for the charities in its group. The board of this charity makes significant decisions for the running of the group. All of the Members of the Board of Trustees of The Pilgrims Friend Group are also on the board of one or more of the Group’s subsidiary entities. The trustees of the Pilgrims Friend Group are distributed so that we have the capacity to manage conflicts of interest while transacting business between charities.

Pilgrims’ Friend Society and The Pilgrim Friends Group have identical objects with the primary object being "the advancement of the Christian faith and the relief of poverty, sickness, disablement, old age and infirmity for the public benefit to the glory of God". Strathclyde House Trust has similar objectives to these two charities.

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The objects of Pilgrim Homes and its successor charity Pilgrim Homes Trust are: "The relief either individually or collectively of poverty, sickness, disablement, and infirmity of older people of the Protestant Christian faith including by the provision and maintenance of residential care and housing".

Pilgrims' Friend Society advances the Christian faith by operating Christian care and housing for older people and by producing resources that inspire, encourage and equip others in their work of caring for older people.

Pilgrims' Friend Society operates all our homes and schemes in the group in the same way to ensure the same quality of Christian Care and to give us economies of scale in our operations.

Pilgrim Homes Trust (and Pilgrim Homes before it) fulfils its objects through the ownership of care homes and housing schemes which are operated on its behalf by Pilgrims' Friend Society. Pilgrim Homes Trust is the group charity building the first of our Renewal Programme homes at Chippenham (Middlefields House).

The Annual Review section of this report sets out how our work provides accommodation and care to older people through the provision of Christian care in a residential setting to those who are over 65 and in need of such accommodation or care as a result of their age, poverty, sickness or disablement.

Our charities advance the Christian faith by ensuring that beneficiaries have every opportunity to pursue their Christian lives. Regular devotions, opportunities to pray and be supported in prayer, Christian services, Bible studies, opportunities to share fellowship and express Christian beliefs and values through crafts and activities are available in all our homes and schemes.

Domiciliary care for residents in our extra care housing scheme at Royd Court in Mirfield is provided by Pilgrim Care, part of Pilgrims' Friend Society.

The benefits of our work are people living safe and fulfilled lives in their later years when they need Christian care and support.

Pilgrims' Friend Society and Strathclyde House Trust (of which it is the sole member) provide a safe, secure environment and a Christian community with opportunities for fellowship with like-minded Christian people.

Public Benefit

The charity’s trustees have considered the guidance regarding public benefit when considering and planning their objectives and activities for the year.

Employment Policies

Pilgrims' Friend Society always selects staff colleagues based on their ability to do the job on offer based on a “Person Specification” for each post. We are fully compliant with Equalities legislation and recognise our obligations, under Disability Discrimination legislation, to consider reasonable modifications to allow people living with a disability to take up employment. We have a genuine occupational requirement for some posts to be filled by Protestant Christians, who agree with our doctrinal basis, to maintain our founding Christian ethos. These issues are dealt with fully under the charity’s Equal Opportunities policies.

All our homes hold regular meetings for all colleagues which are designed to impart information regarding developments within the charity and to give staff opportunity to raise issues. Where any specific proposal is likely to have a significant impact on individual members of staff, such staff are consulted in line with current legislation and good practice.

We are in regular communication with our staff colleagues on all matters relating to their terms and conditions of employment. The managers of our homes meet twice a year as the “senior team” and this includes discussion with the trustees as to the future direction of the Society. Significant changes to the work of the Society are typically preceded by a consultation with colleagues in our homes and our volunteers sometimes involving a visit by a member of the executive team and a trustee. We encourage colleagues’ involvement in the Society’s performance and their awareness of the factors affecting our work through a monthly prayer bulletin that is posted on the noticeboards in all our homes and schemes.

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Volunteers

Our home visitors, friends and auxiliary committees are a vital aspect of our work. As well as raising some of the finances we need they also make them go much further through their volunteering. We are particularly grateful to visitors who provide much needed comfort and company to residents and those who lead the regular acts of worship in our homes. The Charity Commission requires we state a number for these volunteers, and we estimate this to be around 200.

Future developments

These are discussed in the Annual Review section of this report.

Related parties

The trustees of the charity consider the following to be related parties:

  1. Key Management Personnel of Pilgrims' Friend Society

  2. The following charities:

  3. a. Pilgrim Homes (charity no. 242266)

  4. b. Pilgrims’ Friend Society (charity no. 1045920, company no. 3027071)

  5. c. Pilgrim Homes Trust (charity no. 1183226, company no. 11685624)

  6. d. Strathclyde House Trust – (charity no. SC025550, company no. SC169848)

  7. PFG Trading Limited - a limited company

  8. Aged Pilgrims' Friend Society Trust Limited - a limited company which holds title to the properties owned by Pilgrim Homes Trust.

Investment policy

These accounts include £2.7 million of investments which are properties owned by Pilgrim Homes which are not suitable to be let to beneficiaries of the Charity and are therefore let as investments to third parties. Some of these properties are close to, or indeed within the curtilage of our care homes and such properties are therefore difficult to dispose of and are, where possible, let to staff members.

The cost of the Renewal Programme at Chippenham (building Middlefields House) has been funded to date by the sale of investments, investing surplus cash reserves, and the sale of property. Further sales of property at Redbourn and Brighton will fund the remainder of the cash outlay, and because the timing of these cash inflows are difficult to predict, £2.5m was borrowed from Lloyds Bank in June 2021.

Given the need for cash, the trustees take the view that it is better to retain the majority of the charity’s funds in bank deposits, rather than investing in other forms of investment.

Principal sources of funding

The group expects to continue to raise most of its income from fees charged to residents of its homes and by charges for its housing. The Renewal Programme will be funded by borrowing, social investment, the sale of some property assets and donations.

As mentioned above, the group has agreed a bridging loan facility of £2.5million with Lloyds Bank to cover timing differences and other short-term impacts of Covid on the group. This comprises a £1.5million Coronavirus Business Interruption Loan under the government facility and a further £1 million interest only loan with Lloyds Bank.

Accommodation charges policy

As with the other related charities, this charity sets the level of charges for accommodation in its care homes based on local market conditions. It does not discriminate against older Christians who may not have the resources to meet the costs of their own care and we accept residents whose fees are met on their behalf by local authorities, notwithstanding the shortfall that then arises. In these circumstances we seek a ‘top-up' from family or friends where possible.

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Risks and regulations

The charity maintains a comprehensive register of risks which is reviewed by the Key Management Personnel at their monthly meetings and by trustees at every trustee meeting. Risks are rated as to both their likelihood and severity. The greatest risks faced by the Charity are:

Risk Actions to mitigate
Pandemic seriously impairs the charity’s ability to deliver
care and head office services to the homes		 Contingency and continuity plans; pandemic policy
The charity is unable to recruit staff with the necessary
skills		 Apprenticeships, career paths and action plans in place.
Remuneration policy. Lobbying through the National Care
Forum when changes to immigration rules threaten staff
availability.
Reduced occupancy in the charities homes means they are
no longer viable		 Effective occupancy marketing. Performance data
monitored and acted on.
Financial drain on the charity from the pandemic Close monitoring of cash, liquidation of illiquid
investments,use of bank loans

Reserves

The Charity holds funds of £39,251,000 at the year end. Restricted funds account for £30,713,000 of this and most of these reserves can be used to fund operational costs of a proportion of the operating entities (the Pilgrim Homes). Of the general and designated funds, £6,624,000 could only be realised by disposing of tangible fixed assets or programme related investments. In addition, a further £1,560,000 is allocated to funding the remaining costs of the new home at Middlefields. This means that the reserves (that is, the part of the charity’s unrestricted funds that is freely available to spend on any of the charity’s purposes) is £354,000 a shortfall of £646,000 against a target of £1,000,000. To bridge this gap, the charity has access to £2.5m of loan finance (drawn down in June 2021) which it will repay using proceeds from the sale of investment properties and a former home which is now closed.

Trustee recruitment and training

Trustees are appointed at a board meeting following a nomination process. Candidates must meet a strict set of specifications concerning personal competence, specialist skills, availability and Christian belief. Once the Board and new trustee decide to proceed with a formal appointment there follows an induction period to familiarise the new trustee with the charity's operations. Newly appointed trustees meet with the Chief Executive and members of the Senior Management Team to provide an introduction to the affairs of the charity, key operational methods and the current strategic plan. Trustee performance is subject to an annual review by the Chairman.

Section 172 statement

The directors consider the key stakeholders of the group to be its customers and its employees. In their decision-making the directors consider both the short and long term impacts. The directors promote the success of the group for the benefit of its stakeholders by:

In addition the directors foster the group’s business relationships with suppliers and maintain a reputaion for high standards of business conduct by specifying values and a code of conduct for staff. The impact of the group’s operations on the community and enviroment is considered when planning new sites.

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STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The trustees (who are also directors of The Pilgrims Friend Group for the purposes of company law) are responsible for preparing the Trustees' Report (incorporating the directors’ report) and the financial statements in accordance with 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).

Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable group and of the income and expenditure of the charitable group for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT OF DISCLOSURE TO AUDITOR

So far as each person who was a trustee at the date of approving this report is aware, there is no relevant audit information of which the charity’s auditor is unaware. Additionally, the trustees individually have taken all the necessary steps that they ought to have taken as trustees in order to make themselves aware of all relevant audit information and to establish that the charity’s auditor is aware of that information.

AUDITORS

Jacob Cavenagh & Skeet were the charitable company’s auditors during the year and have expressed their willingness to continue in that capacity.

Approved by the trustees and signed on their behalf by

A Copeman

Mr A Copeman (Chairman) Date: 23 September 2021

Page 8

(incorporating the income and expenditure account) For the year ended 31 March 2021

Consolidated statement of financial activities

Note
Income from:
Donations and legacies
2
Investments
3
Charitable activities
4
Other trading activities
Other income – Covid grants
Total income
Expenditure on:
Raising funds
5
Charitable activities
6
Total expenditure
Net losses on investments
10
Net income
8
Transfers between funds
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds carried forward		 2021 Total
£000
2,382
361
12,274
2
29
15,048
62
14,432
14,494
( 4)
550
-
550
38,701
39,251		 2020
Unrest-
ricted
Funds
£000
1,650
48
3,919
2
8
5,627
29
5,541
5,570
-

57
-
57
8,481
8,538		 Rest-
ricted
Funds
£000
732
313
8,355
-
21
9,421
33
8,891
8,924
( 4)
493
-
493
30,220
30,713		 Unrest-
ricted
Funds
£000
2,435
38
3,970
20
-
6,463
27
4,722
4,749
-
1,714
( 385)
1,329
7,152
8,481		 Rest-
ricted
Funds
£000
1,225
162
8,984
-
-
10,371
7
9,593
9,600
( 180)

591
385
976
29,244
30,220		 Total
£000
3,660
200
12,954
20
-
16,834
34
14,315
14,349
( 180)
2,305
-
2,305
36,396
38,701

All of the activities are continuing. There were no recognised gains or losses other than those stated above.

The notes on pages 13 to 31 form part of these financial statements.

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Consolidated balance sheet As at 31 March 2021

Note
Fixed assets
Tangible assets
9
Investments
10
Current assets
Stock
12
Debtors and prepayments
13
Cash equivalents on deposit
Cash at bank and in hand
Creditors: Amounts falling due
within one year
14

Net current assets
Total assets less current liabilities
Funds:
15
Unrestricted funds
15&16
Restricted funds (including revaluation reserve
of £0.551m (2020: £1.265m))
17
Total Funds		 2021
£000
2,676
1,925
-
2,623
7,224
(1,937)		 £000
31,245
2,719
33,964

5,287
39,251
8,538
30,713
39,251		 2020
£000
1,813
1,991
1,101
3,038
7,943
(1,202)		 £000
25,938
6,022

31,960
6,741

38,701

8,481
30,220
38,701

The financial statements were approved by the Trustees on 23 September 2021 and signed on their behalf by:

A Copeman J Edwards S Hammersley A R Copeman J Edwards S Hammersley Chairman Finance Committee Chairman Chief Executive

Company Registration No: 07169875

The notes on pages 13 to 31 form part of these financial statements.

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Company balance sheet As at 31 March 2021

2021 2020
Note £000 £000 £000 £000
Fixed assets
Investments 11 43 43
43 43
Current assets
Cash at bank and in hand - -
- -
Creditors: Amounts falling due
within one year - -
Net current assets - -
Total assets less current liabilities 43 43
Funds:
Unrestricted funds 43 43
Restricted funds - -
Total Funds 43 43

The company’s net income for the year was £nil (2020: £nil).

The financial statements were approved by the Trustees on 23 September 2021 and signed on their behalf by:

A Copeman J Edwards S Hammersley
A R Copeman J Edwards S Hammersley
Chairman Finance Committee Chairman Chief Executive

Company Registration No: 07169875

The notes on pages 13 to 31 form part of these financial statements.

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Consolidated statement of cash flows For the year ended 31 March 2021

2021 2020
£000 £000
Cash flows from operating activities
Trading and donations
Net income 550 2,305
Depreciation 885 937
Investment income included in investing activities ( 361) ( 200)
Loss/(gain) on disposal of fixed assets 2 ( 2)
Donation of property (1,130) -
Realised losses/(gains) on disposal of investments ( 78) ( 25)
Movement in fair value of investments 82 205
Net cash (used in)/provided by trading and donations ( 50) 3,220
Working capital movements
(Increase) in housing stocks ( 863) (1,019)
(Increase) in debtors 66 (1,057)
Increase in creditors 735 289
Net cash (used in) working capital movements (62) (1,787)
Net cash provided by operating activities (112) 1,433
Cash flows from investing activities
Tangible fixed assets
Payments on additions of tangible fixed assets ( 825) ( 795)
Payments for land and construction of Middlefields House (4,246) (2,126)
Proceeds on disposal of tangible fixed assets 7 13
Gifted by Strathclyde House Trust - ( 642)
Net cash (used in) tangible fixed assets (5,064) (3,550)
Fixed asset investments
Investment income received 361 200
Payments on additions of fixed asset investments ( 37) ( 701)
Proceeds on disposal of fixed asset investments 3,336 670
Net cash provided by fixed asset investments 3,660 169
Net cash (used in) investing activities (1,404) (3,381)
Net cash (outflow) (1,516) (1,948)
Cash and cash equivalents at 1 April 2020 4,139 6,087
Cash and cash equivalents at 31 March 2021 2,623 4,139

The notes on pages 13 to 31 form part of these financial statements.

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Notes to the financial statements For the year ended 31 March 2021

1. ACCOUNTING POLICIES

The company is registered as a charitable company limited by guarantee incorporated in England and Wales and is governed by its Memorandum and Articles of Association. Its registered office is 175 Tower Bridge Road, London SE1 2AL.

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows:

1a. Basis of accounting

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”), “Accounting and Reporting by Charities” the Statement of Recommended Practice for Charities applying FRS 102, the Companies Act 2006 and UK Generally Accepted Accounting Practice. The charity is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £1,000.

The financial statements have been prepared on the historical cost convention, modified to include certain investments and financial instruments at fair value.

1b. Consolidation

The consolidated financial statements combine the results of the charity and its subsidiary undertakings which are as follows:

Name Activities
The Pilgrims Friend Group Parent charity with no assets, income or expenditure of its own
Pilgrims' Friend Society Operation of care homes and sheltered accommodation
Pilgrim Homes (formerly
Aged Pilgrims' Friend Society) Operation of care homes and sheltered accommodation
Pilgrim Homes Trust Operation of care homes and sheltered accommodation
Strathclyde House Trust Operation of sheltered accommodation
PFG Trading Limited Trading activities connected with the group

The transactions and balances of the subsidiary undertakings are included in the consolidated accounts on a line by line basis with intragroup transactions eliminated on consolidation.

Where the charitable company has been installed as sole trustee of a charitable subsidiary during the period the fair value of the assets and liabilities brought into the group is recognised within voluntary income.

A separate Statement of Financial Activities for the charity itself is not presented because the charity has taken advantage of the exemptions afforded by Section 408 of the Companies Act 2006.

1c. Going concern

At the time of approving the financial statements, the trustees have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

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1. ACCOUNTING POLICIES (continued)

1d. Tangible fixed assets

Fixed assets are recorded at historic cost. Expenditure on existing properties is capitalised when works result in an enhancement of economic benefits of the asset. Other expenditure on the properties is charged to the income and expenditure account. Where appropriate, the historic cost less accumulated depreciation of any replaced components is released from the asset and recognised as a loss on disposal.

Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost or valuation, less estimated residual value, of each asset over its expected useful life. The following rates are used on a straight-line basis:

Land nil
Buildings 100 years
Roof 70 years
Electrics 40 years
Windows, doors, heating and plumbing 30 years
Bathrooms and lifts 20 years
Kitchens – sheltered 20 years
Boilers 15 years
Kitchens – residential 10 years
Furniture and equipment – sheltered 10 years
Hard landscaping 5 years
Motor vehicles 4 years
Computer equipment 4 years

1e. Investments

Investments is comprised of listed investments and investment properties. Investment properties comprise properties, all owned by Pilgrim Homes (formerly Aged Pilgrims' Friend Society) which are not suitable for occupation by beneficiaries of the charities within the group and are therefore let on commercial terms to either staff members or third parties. All investments are revalued every year with the investment gains or losses shown in the Statement of Financial Activities.

1f. Income

Housing and care income is recognised on the basis of the period that the service was provided to the resident. Voluntary income and donations (including legacies) are accounted for once the charity has entitlement to the income, it is probable the income will be received and the amount of income receivable can be reliably measured. Where material assets are donated to the company for its use, these are capitalised at the estimated market value at the date of the gift and included under income.

For Job Retention Scheme government grant income, the income is recognised in the period to which the underlying furloughed staff costs relate to. For performance related Covid-19 LA care grants, the income is recognised when the conditions of the grants have been met.

1g. Expenditure

Expenditure is accrued as soon as a liability is considered probable, discounted to present value for longer term liabilities. Charitable expenditure includes all support costs in respect of the company’s activities.

1h. Governance costs

This comprises expenditure on compliance with statutory legal requirements and is included in charitable activities.

Page 14

1. ACCOUNTING POLICIES (continued)

1i. Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the trustee for particular purposes. The aim and use of each designated fund are set out in the notes to the financial statements.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors. The aim and use of each restricted fund are set out in note 18 to the financial statements.

1j. Leases

Rentals payable under operating leases are dealt with on a straight-line basis over the lease term. Total lease repayments have been disclosed over the remaining life of the lease.

1k. Pensions

The company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the company to the fund in respect of the year.

1l. Stocks

Stocks are stated at the lower of cost and net realisable value.

1m. Debtors

Debtors are included at the settlement amount due. Prepayments are valued at the amount prepaid.

1n. Cash and cash equivalents

Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of opening of the deposit.

1o. Creditors and provisions

Creditors and provisions are recognised where the group has a present obligation arising from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are recognised at their settlement amount. Concessionary loans are included at historic cost.

1p. Financial instruments

The charity only has financial assets and liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

Page 15

2. DONATIONS AND LEGACIES

Unrestricted
Restricted
Funds
Funds
£000
£000
Donations
538
193
Gift of net assets from other entities
1,065
65
Legacies
47
474
1,650
732
3.
INCOME FROM INVESTMENTS
Unrestricted
Restricted
Funds
Funds
£000
£000
Bank interest
4
7
Rental of investment properties
44
96
Overage receipt (note 26)
-
195
Dividends
-
15
48
313
4.
INCOME FROM CHARITABLE ACTIVITIES
Unrestricted
Restricted
Funds
Funds
£000
£000
Care fees
3,206
6,857
Housing income
174
690
Extra Care Housing lease sales
539
120
Covid-19 LA care grants
-
688
3,919
8,355		 Total
2021
£000
731
1,130
521
2,382
Total
2021
£000
11
140
195
15
361
Total
2021
£000
10,063
864
659
688
12,274		 Total
2020
£000
391
2,228
1,041
3,660
Total
2020
£000
24
131
-
45
200
Total
2020
£000
10,781
959
1,214
-		 Total
2020
£000
391
2,228
1,041

3,660
12,954

Page 16

5. EXPENDITURE ON RAISING FUNDS

Unrestricted
Restricted
Funds
Funds
£000
£000
Publicity and deputation
29
33
6.
EXPENDITURE ON CHARITABLE ACTIVITIES
Unrestricted
Restricted
Activities split by fund:
Funds
Funds
£000
£000
Housing
163
822
Care
4,005
7,223
Cost of Extra Care leases sold
534
120
Education and training
133
76
Raising awareness
84
25
General support costs
307
53
5,226
8,319
Depreciation and loss on disposal
315
572
5,541
8,891		 Total
2021
£000
62
Total
2021
£000
985
11,228
654
209
109
360
13,545
887
14,432		 Total
2020
£000
34
Total
2020
£000
1,011
10,623
1,203
184
95
264
13,380
935
14,315

Page 17

6. EXPENDITURE ON CHARITABLE ACTIVITIES (continued)

Analysis by activity:
Housing
£000
Salaries and wages
326
Food
99
Administrative expenses
35
Repairs and maintenance
220
Heat and light
51
Other expenses
99
Cost of Extra Care leases sold
-
Professional fees
-
Governance costs: audit fees
-
Allocated administrative costs
155
985
Buildings depreciation
211
General depreciation
26
Loss/(gain) on disposal
-
1,222		 Extra care
Education
Raising
General
Care
leases
& training
awareness
support
£000
£000
£000
£000
£000
7,287
-
71
25
1,215
466
-
-
-
-
392
-
4
-
488
614
-
-
-
-
249
-
-
-
-
722
-
134
84
-
-
654
-
-
-
106
-
-
-
177
-
-
-
-
27
1,392
-
-
-
(1,547)
11,228
654
209
109
360
453
-
-
-
163
-
-
32
-
-
-
-
2
11,844
654
209
109
394		 Total
2021
£000
8,924
565
919
834
300
1,039
654
283
27
-

13,545

664
221
2
(
14,432
 Total
2020
£000
8,598
614
770
762
333
789
1,203
283
28
-
13,380
703
234
2)
14,315

During the year the auditors were paid £14,000 for non-audit services (2020: £52,000).

Support costs (less allocated administrative costs):

Staff costs
Depreciation
Loss/(gain) on disposal
Professional fees
Other administrative expenses		 1,215
32
2
204
488
1,941		 1,145
38
( 7)
214
477
1,867

Page 18

7. STAFF COSTS

Wages and salaries
Redundancy costs
Social security costs
Pension costs
Agency staff costs
The average number of staff employed in the period on headcount was:
Homes
Head Office
The average number of staff employed in the period on a full-time equivalent basis was:
Homes
Head Office		 2021
2020
£000
£000
7,226
7,146
25
60
484
456
273
266
916
670
8,924
8,598
No
No
449
472
29
28
478
500
No
No
284
290
27
25
311
315		 2021
2020
£000
£000
7,226
7,146
25
60
484
456
273
266
916
670
8,924
8,598
No
No
449
472
29
28
478
500
No
No
284
290
27
25
311
315
8,598

No
472
28
500
No
290
25
315

The emoluments of two employees exceeded £60,000 in the year ended 31 March 2021 (2020: two). One of those employees earned between £60,000 and £70,000 and the other earned between £80,000 and £90,000 (2020: one between £60,000 and £70,000 and one between £80,000 and £90,000).

No remuneration was paid to any trustee during the year (2020: £nil). Travel expenses of £nil (2020: £2,864) were reimbursed to 0 trustees (2020: 6 trustees) for items incurred wholly, exclusively and necessarily in the course of the charity’s business.

The total aggregate remuneration of Key Management Personnel for the year was £472,483 (2020: £399,707).

The total remuneration (including gross salary, employer’s National Insurance, benefits in kind and employer’s pensions contributions) paid to family members of the trustees was £59,815 (2020: £57,812).

8. NET INCOME/(EXPENDITURE)

NET INCOME/(EXPENDITURE)
2021 2020
£000 £000
This is stated after charging:
Depreciation 885 937
Loss on disposal 2 ( 2)
Auditors’ remuneration for audit services 32 31
Auditors’ remuneration for other services 14 52

Page 19

9. TANGIBLE FIXED ASSETS

Freehold and
Assets in
Furniture,
leasehold
the course of
fittings and
Motor
properties
construction
equipment
vehicles
£000
£000
£000
£000
Cost
As at 1 April 2020
30,173
806
1,833
105
Additions
1,979
4,113
109
-
Disposals
-
-
( 82)
-
(
As at 31 March 2021
32,152
4,919
1,860
105
Depreciation
As at 1 April 2020
5,935
-
1,004
40
Charge for the year
662
-
201
22
Released on disposals
-
-
( 73)
-
As at 31 March 2021
6,597
-
1,132
62
Net book value
As at 31 March 2021
25,555
4,919
728
43
As at 31 March 2020
24,238
806
829
65		 Total
£000
32,917
6,201
82)
39,036
6,979
885
( 73)
7,791
31,245
25,938

The properties detailed above are owned by Pilgrims’ Friend Society, Pilgrim Homes Trust and Strathclyde House Trust, which are subsidiaries of The Pilgrims Friend Group. Details of cost or deemed cost of the properties is detailed below and on the following page:

Pilgrims’ Friend Society
Freehold property:
Bethany Christian Home, Plymouth
Ernest Luff Care Home, Walton-on-the-Naze
Ernest Luff House, Walton-on-the-Naze
Emmaus Care Home, Harrogate
Permanent landscape, Ernest Luff Care Home
Florence House, Peterborough
Carey Gardens, Kirby Muxloe
Strathclyde House Trust
Freehold property:
Strathclyde House, Skelmorlie
Carried forward		 2021
2020
£000
£000
584
576
2,078
1,840
1,552
1,545
877
869
34
34
652
621
1,130
-
6,907
5,485
903
841
7,810
6,326

Page 20

9. TANGIBLE FIXED ASSETS (continued)

Pilgrim Homes Trust
Freehold property:
Dorothea Court, Bedford
Leonora Home, Chippenham
Great Finborough Home
Great Finborough Housing
Evington Home, Leicester
Shottermill Home, Haslemere
Milward Home, Tunbridge Wells
Wantage Home
Royd Court, Mirfield
Pilgrim Gardens, Evington, Leicester
Land at Churston Ferrers
Redbourn retirement flats
Brighton Home (at deemed cost)
Assets in the course of construction (including land already purchased):
Middlefields House Chippenham
Long leasehold property:
Crosfield Court, Watford
Brought forward from previous page
Total properties and assets in the course of construction		 2021
£000
4,379
327
1,674
2,437
2,208
1,459
1,290
1,588
3,484
2,081
60
1,300

464
22,751
6,367

29,118
143
29,261
7,810
37,071		 2020
£000
4,363
327
1,727
2,389
2,159
1,399
1,255
1,558
3,440
2,081
60
1,300
464
22,522
1,988

24,510
143
24,653
6,326
30,979

Page 21

10. INVESTMENTS - GROUP

INVESTMENTS - GROUP
Listed Investment
investments properties Total
£000 £000 £000
Valuation
As at 1 April 2020 1,925 4,097 6,022
Additions 33 4 37
Disposals (1,958) (1,300) (3,258)
Revaluation - ( 82) **( 82) **
As at 31 March 2021 - 2,719 2,719
Held by
Restricted funds - 2,719 2,719
Historic cost
As at 31 March 2021 - 2,167 2,167
Investment properties comprise the following:
2021 2020
£000 £000
At market value:
No’s 8,10,12, 14 and 16 Harding Close, Redbourn
(8, 10 and 14 sold during the year) 830 2,175
House on Pilgrims’ Way, Great Finborough 238 225
60 Royd Court, Mirfield 199 186
90a Wood Lane, Chippenham 324 355
90 Wood Lane, Chippenham 308 357
92 Wood Lane, Chippenham 475 472
House on Liphook Road, Haslemere 345 327
2,719 4,097

The investment properties were revalued at the open market value as at 31 March 2021 by the Director of Property Services, Andy Walsh ARIBA.

The net losses on investments for the year is made up of:

The net losses on investments for the year is made up of:
£000
Realised loss of sale of Redbourn flats ( 61)
Realised gain on sale of listed investments 139
Revaluation of investment properties ( 82)
**( 4) **
11. INVESTMENTS – COMPANY ONLY
2021 2020
£000 £000
Investment in PFG Trading Ltd 43 43
43 43

Page 22

12. STOCK

STOCK
2021 2020
£000 £000
Stock of flats held for resale (see below) 2,603 1,798
Preliminary costs of new building 58 -
Stock of books 15 15
2,676 1,813
Strathclyde House Royd Court Pilgrim Gardens
Number Cost Number Cost Number Cost Total
No £000 No £000 No £000 £000
As at 1 April 2020 13 1,021 3 351 3 426 1,798
Sold ( 5) ( 534) ( 1) (120) - - ( 654)
Bought back 8 794 2 382 2 283 1,459
As at 31 March 2021 16 1,281 4 613 5 709 2,603

Contingent liabilities on housing stock

Under the terms of the sale of properties at Strathclyde House, the Strathclyde House Trust has the right of first refusal when freehold flats are offered for sale and it is the practice of the charity to exercise that right to maintain the ethos and atmosphere on the site. The total potential value of the flats not held in stock at 31 March 2021 is £3.5 million.

Under the terms of the sale of leases at Royd Court, Pilgrim Homes Trust is committed to repurchase leases should leaseholders cease to be residents. The total potential value of the flats not held in stock at 31 March 2021 is £3.45 million.

Under the terms of the sale of leases at Pilgrim Gardens, Pilgrim Homes Trust is committed to repurchase leases should leaseholders cease to be residents. The total potential value of the flats not held in stock at 31 March 2021 is £1.58 million.

13. DEBTORS AND PREPAYMENTS

Arrears of local authority and residents’ contribution
Amounts owed from Pilgrim Gardens service charge
Amounts owed from Royd Court service charge
Amounts owed from Strathclyde service charge
Other debtors and prepayments		 2021
2020
£000
£000
161
344
80
1
72
7
151
482
1,461
1,157
1,925
1,991

Page 23

14. CREDITORS AND ACCRUALS: amounts falling due within one year

Residents’ contributions in advance
Trade creditors
Taxation and social security
Other creditors and accruals		 2021
2020
£000
£000
-
2
322
501
119
72
1,496
627
1,937
1,202

Included within other creditors is a £200,000 loan from the Souter Charitable Trust to Strathclyde House Trust which was given to assist with the buy back of flats. It is repayable at 4% above base rate and is repayable when the flats are resold. The loan is secured on flats 15, 61 and 62 at Strathclyde House, which have an estimated market value of £240,000.

15. ANALYSIS OF NET ASSETS BETWEEN FUNDS

15.
ANALYSIS OF NET ASSETS BETWEEN FUNDS		 15.
ANALYSIS OF NET ASSETS BETWEEN FUNDS		 15.
ANALYSIS OF NET ASSETS BETWEEN FUNDS		 15.
ANALYSIS OF NET ASSETS BETWEEN FUNDS
General
Designated
Restricted
Funds
Funds
Funds
£000
£000
£000
2021
Fixed assets
Tangible
5,960
664
24,621
Investments
-
-
2,719
Current assets
2,249
1,602
3,373
Current liabilities
(1,724)
( 213)
-

Total Net Assets
6,485
2,053
30,713
2020		 Total
Funds
£000
31,245
2,719
7,224
( 1,937)
39,251
Fixed assets
Tangible 6,545 825 18,568 25,938
Investments - - 6,022 6,022
Current assets 816 1,497 5,630 7,943
Current liabilities
 (1,192) ( 10) - ( 1,202)
Total Net Assets 6,169 2,312 30,220 38,701

16. DESIGNATED FUNDS

Brought
Net assets
Carried
forward at 1
gifted/
forward at 31
April 2020
Income
Expenditure
transfers
March 2021
£000
£000
£000
£000
£000
2021
Futures Fund
199
218
(263)
(154)
-
Strathclyde House Trust
2,113
613
(673)
-
2,053
2,312
831
(936)
(154)
2,053
2020		 Brought
Net assets
Carried
forward at 1
gifted/
forward at 31
April 2020
Income
Expenditure
transfers
March 2021
£000
£000
£000
£000
£000
2021
Futures Fund
199
218
(263)
(154)
-
Strathclyde House Trust
2,113
613
(673)
-
2,053
2,312
831
(936)
(154)
2,053
2020		 Brought
Net assets
Carried
forward at 1
gifted/
forward at 31
April 2020
Income
Expenditure
transfers
March 2021
£000
£000
£000
£000
£000
2021
Futures Fund
199
218
(263)
(154)
-
Strathclyde House Trust
2,113
613
(673)
-
2,053
2,312
831
(936)
(154)
2,053
2020		 Brought
Net assets
Carried
forward at 1
gifted/
forward at 31
April 2020
Income
Expenditure
transfers
March 2021
£000
£000
£000
£000
£000
2021
Futures Fund
199
218
(263)
(154)
-
Strathclyde House Trust
2,113
613
(673)
-
2,053
2,312
831
(936)
(154)
2,053
2020
Futures Fund 248
47
( 96)		 - 199
Strathclyde House Trust -
466
(581)
 2,228 2,113
248
513
(677)		 2,228 2,312

Page 24

17. a) RESTRICTED FUNDS – PILGRIM HOMES

17. a) RESTRICTED FUNDS – PILGRIM HOMES
Brought Carried
forward at 1 Revaluations forward at 31
2021 April 2020 Income Expenditure and transfers March 2021
Funds restricted by Pilgrim Homes articles: £000 £000 £000 £000 £000
General unrestricted funds
Pilgrim Homes Fund 8,386 8,542 (8,094) (5,580) 3,254
Designated Funds
Operational Assets Equity Fund 15,992 - - 7,914 23,906
Operational Risk Reserve 1,030 - - - 1,030
Property Emergency Repair Fund 50 - - - 50
Futures Fund 2,338 - - (2,338) -
Total designated funds restricted by Pilgrim Homes articles 19,410 - - 5,576 24,986
Pilgrim Homes Restricted Funds
St Albans Home 441 - - - 441
Lucy McNeil Home 1,849 - - - 1,849
Homes Voluntary Support Funds (see note 16c) 66 36 ( 14) - 88
Total restricted funds restricted by Pilgrim Homes articles 2,356 36 ( 14) - 2,378
Total restricted funds – Pilgrim Homes 30,152 8,578 (8,108) ( 4) 30,618
17. b) RESTRICTED FUNDS – GENERAL
NYCC Grant 1 - - - 1
Faith in Later Life 41 84 ( 125) - -
Homes Voluntary Support Funds (see note 16c) 7 4 ( 3) - 8
Local Homes Project Funds 15 - - - 15
Carey Gardens - 65 - - 65
Covid-19 LA Grants Fund - 688 ( 688) - -
Dementia Fund 4 2 - - 6
Total restricted funds - general 68 843 ( 816) - 95
Total restricted funds 30,220 9,421 (8,924) ( 4) 30,713

Page 25

17. c) RESTRICTED FUNDS – HOMES VOLUNTARY SUPPORT FUNDS

Brought Carried
forward at 1 Revaluations forward at 31
April 2020 Income Expenditure and transfers March 2021
2021 £000 £000 £000 £000 £000
Funds restricted by Pilgrim Homes articles:
Chippenham 1 4 ( 2) - 3
Great Finborough 24 10 - - 34
Evington 17 9 (11) - 15
Tunbridge Wells 3 2 - - 5
Wantage 3 7 - - 10
Shottermill 18 3 ( 1) - 20
Bedford - 1 - - 1
Total funds restricted by Pilgrim Homes articles 66 36 (14) - 88
Other restricted funds
Ernest Luff Care - 1 - - 1
Bethany Christian Home 2 1 - - 3
Emmaus House 5 - ( 3) - 2
Florence House - 2 - - 2
Total Homes Voluntary Support Funds 73 40 ( 17) - 96

Page 26

18. a) RESTRICTED FUNDS – PILGRIM HOMES

18.
a) RESTRICTED FUNDS – PILGRIM HOMES		 18.
a) RESTRICTED FUNDS – PILGRIM HOMES		 18.
a) RESTRICTED FUNDS – PILGRIM HOMES		 18.
a) RESTRICTED FUNDS – PILGRIM HOMES		 18.
a) RESTRICTED FUNDS – PILGRIM HOMES		 18.
a) RESTRICTED FUNDS – PILGRIM HOMES		 18.
a) RESTRICTED FUNDS – PILGRIM HOMES		 18.
a) RESTRICTED FUNDS – PILGRIM HOMES
Brought
Carried
forward at 1
Revaluations
forward at 31
2020
April 2019
Income
Expenditure
and transfers
March 2020
Funds restricted by Pilgrim Homes articles: £000 £000 £000
£000		 £000
General unrestricted funds
Pilgrim Homes Fund 8,123 9,385
 (9,434)
312		 8,386

Designated Funds
Operational Assets Equity Fund 15,992 - -
-		 15,992
Operational Risk Reserve 1,030 - -
-		 1,030
Property Emergency Repair Fund 50 - -
-		 50
Futures Fund 1,678 808 ( 86)
( 62)		 2,338

Total designated funds restricted by Pilgrim Homes articles 18,750 808 ( 86)
( 62)		 19,410

Pilgrim Homes Restricted Funds
St Albans Home 438 3 -
-		 441
Lucy McNeil Home 1,841 8 -
-		 1,849
Homes Voluntary Support Funds (see note 16c) 61 49 ( 3)
**( 41) **		 66

Total restricted funds restricted by Pilgrim Homes articles 2,340 60 ( 3)
( 41)		 2,356

Total restricted funds – Pilgrim Homes 29,213
 10,253
 (9,523)
209		 30,152

18.
b) RESTRICTED FUNDS – GENERAL

NYCC Grant 1 - -
-		 1
Faith in Later Life 5 113 ( 77)
-		 41
Homes Voluntary Support Funds (see note 16c) 10 1 -
( 4)		 7
Local Homes Project Funds 12 3 -
-		 15
Dementia Fund 3 1 -
-		 4
Total restricted funds - general 31 118 ( 77)
( 4)		 68

Total restricted funds 29,244
 10,371
 (9,600)
205		 30,220

Page 27

18. c) RESTRICTED FUNDS – HOMES VOLUNTARY SUPPORT FUNDS

Brought Carried
forward at 1 Revaluations forward at 31
April 2019 Income Expenditure and transfers March 2020
2020 £000 £000 £000 £000 £000
Funds restricted by Pilgrim Homes articles:
Brighton - 3 - ( 3) -
Chippenham - 1 - - 1
Great Finborough 23 6 - ( 5) 24
Evington 11 14 - ( 8) 17
Tunbridge Wells 8 4 - ( 9) 3
Wantage 5 13 - (15) 3
Shottermill 14 7 (3) - 18
Bedford - 1 - **( 1) ** -
Total funds restricted by Pilgrim Homes articles 61 49 (3) (41) 66
Other restricted funds
Bethany Christian Home 2 - - - 2
Emmaus House 8 1 - ( 4) 5
Florence House - - - - -
Total Homes Voluntary Support Funds 71 50 ( 3) (45) 73

Page 28

19. FURTHER DETAILS ABOUT RESTRICTED AND DESIGNATED FUNDS

Pilgrim Homes Fund

This heading includes the reserves of Pilgrim Homes and the Pilgrim Homes Restricted Fund which were transferred from those charities to Pilgrim Homes Trust on 31 March 2020.

Operational Assets Equity Fund

Established to reflect the value of fixed asset properties owned by Pilgrim Homes Trust which would not be capable of disposal without affecting the ongoing work of the charity.

Operational Risk Reserve

This fund consists of funds required to ensure the continuity of care in the event of a major disruption to the operation of the charity.

Property Emergency Repair Fund

This fund has been established within Pilgrim Homes to meet the costs of emergency repairs to that charity's properties.

Futures Funds

The trustees have agreed to designate all legacies received over £100,000 to these funds, which would then be available to meet the costs of redeveloping the properties owned by the group. The balance was transferred out during the year to meet the costs of the Middlefields development.

Strathclyde House Trust Fund

This represents the value of the assets held within Strathclyde House Trust.

St Albans and Lucy McNeil Home Funds

These funds relate to the receipt of donations and the proceeds of various fundraising activities for the purpose of establishing new homes.

Watford funds

During 2004, Pilgrim Homes became responsible for the management of the various funds which constitute the Watford Tabernacle Almshouse Trust. The site was then sold, and suitable accommodation was found for the two remaining residents. The funds were utilised in the year for the purchase of the Redbourn flats and a transfer to the general fund was made.

NYCC grant (Emmaus)

This relates to £2,250 received from NYCC in the year ended 31 December 2007 for the purchase of the Conservatory Heating and a Hospital Bed and Mattress. The grant is being released at the same rate as the deprecation of the assets to which it relates, i.e. 15% reducing balance basis. Therefore, the deduction is the brought forward amount multiplied by 15%.

Faith in Later Life

This represents donations from the Outlook Trust and a number of partner charities for use towards the costs of the ‘Faith in Later Life’ initiative mentioned in the Trustees' report. This initiative is in the course of being incorporated as a separate charity and following incorporation the balance of funds held will be transferred to this new charity.

Local Homes Project Funds

These represent the amounts raised and spent by local homes towards specific locally agreed initiatives within specific homes.

Dementia Fund

This fund is utilised to assist in meeting the costs of new initiatives to better look after our residents with dementia.

Homes Voluntary Support Funds

Homes Voluntary support funds represent donations made by supporters for the purpose of improving care at specific homes. These funds are also available, in the event of a home making a trading loss in a financial year, to reduce the loss sustained.

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19. FURTHER DETAILS ABOUT RESTRICTED AND DESIGNATED FUNDS (continued)

Covid grants

This relates to grants receive by local authorities to deal with increased costs of dealing with the pandemic (e.g. staff and personal protective equipment).

Carey Gardens

This represents a donation to fund substantial capital improvements at Carey Gardens, as a supplement to the sinking fund contributions paid by residents.

20. LEASING COMMITMENTS

Operating leases

The charitable company’s total future minimum lease payments under operating leases at 31 March 2021 were payable as set out below:

as set out below:
2021 2020
£000 £000
Within one year 79 104
Within two to five years - 79
79 183
The operating lease charges for the year were:
2021 2020
£000 £000
Land and buildings 85 74
Hire of plant and machinery 101 97
186 171

The lease over 175 Tower Bridge Road, London expired on 31 December 2014. Since that date the charity has continued to pay rent at the existing annual rate of £67,000. The charity is required to give 3 months’ notice under Section 27 of the Landlord & Tenant Act 1954 of its intention to vacate the premises.

21. PENSION COMMITMENTS

The pension cost charge represents contributions payable by the group to the pension funds. There were contributions of £20,000 due to the fund at the period end (2020: £20,000).

The Society also makes a small number of ex gratia pension payments to former employees. The annual commitment to make these payments has been reducing over the past few years and currently stands at around £6,000 per annum. A few years ago the trustees considered whether to accrue for this liability but, given the amounts payable, the age of those receiving a pension and the complexity of determining an appropriate reserve, no provision was made.

22. CAPITAL COMMITMENTS

The subsidiary company, PFG Trading Ltd, has engaged Midas Construction Limited as sub-contractor for the development at Middlefields, a site in Chippenham, and entered into a building contract sum of £5,403,109 last year. At the year end there was £1,560,203 outstanding, which has yet to be invoiced.

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23. CONTINGENT LIABILITITY

A gift of £500,000 was made to Strathclyde House Trust by the Souter Charitable Trust in June 2019. This gift was made subject to a repayment clause which stated that in the event that Strathclyde House was to be disposed of by the charity within a period of the ten years commencing 3 June 2019, Strathclyde House Trust would be obliged to repay a proportion of the gift to the Souter Charitable Trust. The amount due to be repaid reduces by £50,000 for each complete year that Strathclyde House is owned by the Pilgrim Friends Group. At the date of these accounts, the maximum repayment due would be £450,000. The Pilgrim Friends Group has no plans to dispose of Strathclyde House.

24. RELATED PARTY TRANSACTIONS

Details of trustees' and key management personnel and remuneration are disclosed in note 7 to the financial statements.

25. LIFE TENANCY

In 2012 the charity was notified of a legacy which included a share of a freehold property, which is subject to a life tenancy. The conditions for recognition of this income have not been met and therefore this legacy is not included as income in the accounts. The estimated value of the legacy is unknown at present.

26. WELLSBOROUGH OVERAGE RECEIPT

An overage agreement entered into on the sale of the site of the former Wellsborough Care Home has resulted in a cash receipt of £195,000 which has been recognised as income in the statement of financial activities. A further amount will become due when more of the houses on the site have been sold. This could be some £584,000. Because of credit risk, delays to the development and risks to the profitability in the housing sector, there are significant risks that this sum will not be realised, and therefore it has not been recognised as an asset at year end.

27. COMPANY LIMITED BY GUARANTEE

The organisation is a charitable company limited by guarantee and has no share capital. In the event of the company being wound up, members are required to contribute an amount not exceeding £1.

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Statutory information

DIRECTORS AND TRUSTEES

Alan Copeman (Chairman) John Edwards Michael Abbott Max Robinson (appointed 30 April 2020) Genefer Espejo Dr Judy McLaren

Bryan Jarvis (Vice-Chairman) Andrew Symonds (Vice-Chairman) Sheila Warnes Robin Turnbull Philip Oliver (appointed 30 April 2020)

COMPANY SECRETARY

Adrian Bray (until 31 July 2020) Debbie Buggs (from 1 August 2020)

REGISTERED OFFICE

175 Tower Bridge Road London SE1 2AL

COMPANY NUMBER 07169875 CHARITY NUMBER 1134979

BANKERS

Lloyds Bank plc 25 Gresham Street London EC2V 7HN

AUDITORS

Jacob Cavenagh & Skeet Chartered Accountants 5 Robin Hood Lane Sutton Surrey SM1 2SW

KEY MANAGEMENT PERSONNEL

The Key Management Personnel of the charity were the Trustees and the members of Senior Management Team whose names and responsibilities are listed below:

Stephen Hammersley Chief Executive Officer Maureen Sim Director of Operations Adrian Bray Company Secretary (to 31/07/2020) Debbie Buggs Director of Finance (from 01/06/2020) and Company Secretary (from 01/08/2020) Andy Walsh Director of Property Services Phil Wainwright Director of Human Resources and IT Alexandra Davis Director of Marketing

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Independent auditor’s report to the trustees of The Pilgrims Friend Group

OPINION

We have audited the financial statements of The Pilgrims Friend Group (the ‘parent charity’) and its subsidiaries (the ‘group’) for the year ended 31 March 2021 which comprise the consolidated Statement of Financial Activities, the consolidated and company’s Balance Sheets, the consolidated Statement of Cash Flows and the notes to the financial statements, including a summary of significant accounting policies. 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 director’s 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 charity’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

OTHER INFORMATION

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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.

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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.

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OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report included with 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:

RESPONSIBILITIES OF TRUSTEES

As explained more fully in the trustees' responsibilities statement set out in the trustees’ report, the trustees' (who are also the directors of the charitable company for the purposes of company law) 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 charity’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 company or to cease operations, or have no realistic alternative but to do so.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

We have been appointed as auditor under section 145 and report in accordance with the Act and relevant regulations made or having effect thereunder.

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:

Based on our understanding of the charity, we identified that the principal risks of non-compliance with laws and regulations related to charity financial reporting, employment, health & safety and care and we considered the extent to which noncompliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Charities Act 2011.

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We assessed the susceptibility of the charity's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management, considering the internal controls in place and discussion amongst the engagement team.

We determined that the principal risks were related to:

In response to the risks identified we designed procedures which included, but were not limited to:

There are inherent limitations in the 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. 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.

USE OF OUR REPORT

This report is made solely to the 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 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 company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Newton

Paul Newton FCA (Senior Statutory Auditor) for and on behalf of Jacob Cavenagh & Skeet

Chartered Accountants Statutory Auditor

Date: 28 September 2021

5 Robin Hood Lane Sutton Surrey SM1 2SW

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