## **THE PILGRIMS FRIEND GROUP**
## **Group Financial Statements For the year ended 31 March 2022**
**COMPANY NUMBER** 07169875 **CHARITY NUMBER** 1134979
**Contents of the financial statements**
**Page** 1 - 7 Trustees’ report 8 Consolidated statement of financial activities 9 Consolidated balance sheet 10 Company balance sheet 11 Consolidated statement of cash flows 12 - 30 Notes to the financial statements 31 Statutory information 32 - 34 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 2022. 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 31.
## **MISSION REVIEW**
As a Christian charity we hold to the value of prayer in that God answers the prayers of people who ask in faith, and we know that we cannot deliver against our charitable objects to advance the Christian faith amongst older people through our homes and schemes apart from God’s help. During the year we have maintained daily times of prayer with most managers and trustees present.
These daily times, our occasional mini conferences over Zoom; and our in-person conference for managers and trustees in September have shown that we are blessed with a cohort of leaders whose faith and trust in God is strong, who support and encourage each other, and who are deeply committed to supporting spiritually the people who live with us.
During the year we developed, with our colleagues, four values, based on the Bible, that sum up how we want to live out our Christian faith: Compassion; Community; Transparency; and Excellence. These values are helping us engage with our staff colleagues whether or not they have a personal commitment to the Christian faith.
## Our people have excelled
The big picture overview is a story of our staff colleagues’, and particularly our managers’, outstanding resilience, and performance in the face of the challenges of Covid 19, for which we give thanks to God.
The financial year started in April 2021 with the charity (and country) just coming out of the second wave lockdown, with outbreaks and significant numbers of people still dying even as the drive to vaccinate frail and vulnerable people was picking up pace. The chart below reminds us of the depth of the valley that we were in as we started the year,
**----- Start of picture text -----**
Number of deaths involving COVID‐19 occurring in care homes, by day of
notification 1 Jan to 31 Dec 2021, England. Source CQC
500
400
300
200
100
0
1/1/21 1/2/21 1/3/21 1/4/21 1/5/21 1/6/21 1/7/21 1/8/21 1/9/21 1/10/21 1/11/21 1/12/21
**----- End of picture text -----**
Our people in our homes, schemes and support teams were outstanding and this was recognised by relatives whom we surveyed during this period.
The remarkable effectiveness of the vaccines is evident from the chart, but the challenge of the pandemic persisted albeit in a different form as infections climbed and staff absences through isolation and illness exacerbated underlying challenges of recruiting and retaining enough people.
Page 1
**----- Start of picture text -----**
300,000
Number of UK Daily Covid Cases Reported by ONS for
Financial Years 20/21 and 21/22
250,000
200,000
150,000
100,000
50,000
0
1/4/20 1/5/20 1/6/20 1/7/20 1/8/20 1/9/20 1/10/20 1/11/20 1/12/20 1/1/21 1/2/21 1/3/21 1/4/21 1/5/21 1/6/21 1/7/21 1/8/21 1/9/21 1/10/21 1/11/21 1/12/21 1/1/22 1/2/22 1/3/22
**----- End of picture text -----**
Our managers and leaders in our homes and schemes and in our support teams were again outstanding as, in the teeth of these challenges, the quality of our care has remained high (based on our internal audits) and the occupancy in our homes recovered rapidly and faster than expected.
During the year we completed sufficient of our job evaluation project and additional survey work that identified gaps opening particularly at a home level between our pay and local market rates. To try and improve retention and recruitment (and prevent it deteriorating) this led us to bring forward the annual pay increases for hourly paid staff from April 2022 to January 2022.
There is no doubt that our people deserved financial recognition to go alongside the letters and messages of commendation that they received.
## Our Projects have delivered
As the timeline for Covid attached shows this has been a demanding year operationally for our front-line teams and those who work in support as regulations, guidance and conditions have changed regularly and significantly.
In addition to these ongoing challenges, we have progressed and delivered several significant planned projects:
- Our bespoke approach to living alongside and with people The Way We Care is now in place in all of our residential care homes and the language and reality of “being like a family” is now our norm.
- We have established Activity and Community Engagement Facilitators in all our homes: Christian staff with a mission to re-establish and develop links with local churches and communities after the covid lockdowns and briefed to identify, train and develop volunteers for the benefit of our homes and the churches from which they come.
- The Renewal Programme took a significant step forward though the acclaimed launch of our award-winning new care home in Chippenham, Middlefields House, built to replace our Leonora Home and to support The Way We Care and our community engagement aspirations. It is to the credit of all involved that this was delivered broadly to budget and time and that the initial reactions to the home have been so positive. Demand has been high and the key constraint to its growth has been the high incidence of Covid resulting in slower than hoped for admissions and staff shortages.
- The Renewal Programme on the South Coast (Worthing) also progressed through a significant project to bring the Koinonia Home within Pilgrims’ Friend Society (effective 1 April 2022) and the continued search for a site for a new home in the area. Again, under the umbrella of the Renewal Programme we have progressed the sale of houses and flats at Redbourn, the (closed) home in Brighton, land at Churston Ferriers; and the sale of the site of the Leonora home in Chippenham.
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- In support of our front-line operations, we have also done significant work to:
- Upgrade and streamline our finance systems
- Introduce and embed in our residential care homes: mobile point of care; digital medication ordering and care audit tools
- Get up to speed with the use of Donorfy, our new and more GDPR compliant supporter database
- Migrate our systems to the cloud and away from our own vulnerable, inflexible, and unreliable servers.
- Risks have been reduced through projects to reduce vulnerability to hacking and cyber-attack (cloud-based servers; data security training and briefings; older vulnerable PCs replaced; updated policies); and to reduce data protection GDPR risks (staff training).
- We were pleased that Middlefields House won the Pinders Healthcare Design Award announced in March 2022.
## Significant events have been responded to
Exceptional situations have arisen that required us to respond:
- Extremely low occupancy because of Covid and problems finding Christian managers required us to review the future of our home in Peterborough. Having announced the need to close the home we were delighted that it was instead acquired by a mother and daughter team who run a local home and who, supported by two volunteers, promised to maintain the Christian ethos of the home.
- We were able to help Melbourne Home in Leicester close in an orderly and sympathetic way by providing operational management and support. As of 1 April 2022, Pilgrims’ Friend Society was appointed the sole corporate trustee of the charity that owns the home, and an offer was accepted for the home for £1.2m.
- We were able to help the Gospel Standard Home near Chippenham close well in emergency circumstances.
- New (post-Grenfell) fire regulations have required several property projects totalling almost £0.75m.
- The need to replace the roof at Strathclyde House and a difficult trading year has prompted us to engage with residents about better ways of paying the bills and a review of the support needed from Pilgrims’ Friend Society.
## Scale of our impact
We ended the year with 224 of 250 (89%) residential care places filled whereas a year earlier we had 206 of 253 (81%) places. During the year we lost 19 places with the sale of Florence House, and gained 16 more places in the Chippenham area with the opening of Middlefields, replacing Leonora. At the end of the year three out of four households were in use at Middlefields (equating to 36 places) and by the autumn of 2022 we pray that the one remaining household will be open.
Housing occupancy (excluding Strathclyde House) was 86% down from 88% on 31 March 2021. This means that we had 165 people living with us in housing on 31 March 2022, down from 169 on 31/3/21.
## **FINANCIAL REVIEW**
During the year ended 31 March 2022 the group made a net surplus of £74,000 compared to £550,000 in the previous year. The Group benefited from £1.8 million from donations, legacies, and overage on a site that had been sold some years ago.
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 £987,000 against £1,435,000 the previous year. Our budget for the financial year was a deficit of £700,000 as we anticipated a difficult year emerging from Covid.
Page 3
## **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. 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
Page 4
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 conduct a charity wide staff survey and feedback to colleagues on how we respond to the issues raised.
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 at least 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.
## Volunteers
Our volunteers 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:
- a. Pilgrim Homes (charity no. 242266)
- b. Pilgrims’ Friend Society (charity no. 1045920, company no. 3027071)
- c. Pilgrim Homes Trust (charity no. 1183226, company no. 11685624)
- d. Strathclyde House Trust – (charity no. SC025550, company no. SC169848)
3. PFG Trading Limited - a limited company
4. 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 £1.6 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 types of assets.
## 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
Page 5
housing. The Renewal Programme will be funded by borrowing, social investment, the sale of some property assets and donations.
As mentioned above, the group 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, which was fully repaid by the year end.
## 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.
## 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 or other similar event 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 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|
|Price inflation and supply chain delays mean that
the charity is unable to provide an adequate level
of care|Fixed price contracts are negotiated where possible, fee income
increases take account of expected price inflation|
|The charity’s reputation or ability to operate is
impaired bydata beingleaked or corrupted|Standard information technology controls are in place, such as
backups and access controls|
|Inflation and the cost of borrowing mean that the
renewalprogramme is not achievable.|Trends are monitored and alternative sources of funding are
sought.|
## Reserves
The Charity holds funds of £39,325,000 at the year end. Restricted funds account for £32,121,000 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, £7,265,000 could only be realised by disposing of tangible fixed assets or programme related investments. 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 a negative £61,000; a shortfall of £1,061,000 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. Proceeds sufficient to repay the loan are expected to be realised by the end of September 2022.
## 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.
Page 6
## Section 172 statement
The directors consider the key stakeholders of the group to be the people living in our homes and schemes 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:
- considering the likely consequences of strategic and operational decisions in the long term
- rewarding employees performance and encouraging their personal development management briefings development reviews health and well being and social initiatives are used to engage with employees
- providing an excellent service to our customers that is responsive to their needs
- Acting fairly between the group’s key stakeholders when their priorities differ
In addition, the directors foster the group’s business relationships with suppliers and maintain a reputation 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 environment is considered when planning new sites.
## **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:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgments and accounting estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements, and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable group will continue in business.
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
## Michael R Abbott
Mr Michael Abbott (Chairman)
Date: 21/7/22
Page 7
## **Consolidated statement of financial activities (incorporating the income and expenditure account) For the year ended 31 March 2022**
|**Note**
**Income from:**
Donations and legacies
**2**
Investments
**3**
Charitable activities
**4**
Other income
**5**
**Total income**
**Expenditure on:**
Raising funds
**6**
Charitable activities
**7**
**Total expenditure**
Net losses on investments
**11**
**Net (expenditure)/income**
**9**
**Transfers between funds**
**Net movement in funds**
**Reconciliation of funds**
Total funds brought forward
**Total funds carried forward**||**2022**|**Total**
**£000**
**1,262**
**654**
**13,638**
**300**
**15,854**
**25**
**15,483**
**15,508**
**272)**
**74**
**-**
**74**
**39,251**
**39,325**||**2021**||
|---|---|---|---|---|---|---|
||**Unrest-**
**ricted**
**Funds**
**£000**
**207**
**2**
**4,559**
**297**
**5,065**
**22**
**6,377**
**6,399**
**-**
**(1,334)**
**-**
**(1,334)**
**8,538**
**7,204**|**Rest-**
**ricted**
**Funds**
**£000**
**1,055**
**652**
**9,079**
**3**
**10,789**
**3**
**9,106**
**9,109**
**( 272)**
**(**
**1,408**
**-**
**1,408**
**30,713**
**32,121**||**Unrest-**
**ricted**
**Funds**
**£000**
1,650
48
3,919
10
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|**Total**
**£000**
2,382
361
12,274
31
15,048
62
14,432
14,494
(4)
550
-
550
38,701
39,251|
All of the activities are continuing. There were no recognised gains or losses other than those stated above.
The notes on pages 12 to 30 form part of these financial statements.
Page 8
**Consolidated balance sheet As at 31 March 2022**
|**Note**
**Fixed assets**
Tangible assets
**10**
Investments
**11**
**Current assets**
Stock
**13**
Debtors and prepayments
**14**
Cash at bank and in hand
**Creditors**: Amounts falling due
within one year
**15**
**Net current assets**
**Total assets less current liabilities**
**Creditors**: Amounts falling due
after more one year
**16**
**Total assets less current liabilities**
**Funds**:
**17**
Unrestricted funds
**17&18**
Restricted funds (including revaluation reserve
of £0.378m (2021: £0.551m))
**19&20**
**Total Funds**|**2022**
**£000**
**1,855**
**2,752**
**3,402**
**8,009**
**(1,764)**
|**£000**
**32,697**
**1,633**
**34,330**
**6,245**
**40,575**
**( 1,250)**
**39,325**
**7,204**
**32,121**
**39,325**|**2021**
**£000**
2,676
1,925
2,623
7,224
(1,937)|**£000**
31,245
2,719|
|---|---|---|---|---|
|||||
33,964
5,287|
|||||
39,251|
|||||
-
39,251|
|||||
8,538
30,713|
|||||
39,251|
The financial statements were approved by the Trustees on 21 July 2022 and signed on their behalf by:
|Michael R Abbott|Max Robinson|S J Hammersley|
|---|---|---|
|M Abbott|M Robinson|S Hammersley|
|**Chairman**|**Trustee**|**Chief Executive**|
Company Registration No: 07169875
The notes on pages 12 to 30 form part of these financial statements.
Page 9
**Company balance sheet As at 31 March 2022**
||||**2022**||**2021**||
|---|---|---|---|---|---|---|
||**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 (2021: £nil).|||||||
|The financial statements were approved by the Trustees on 21 July 2022|||and signed on their behalf|by:|||
|Michael R Abbott|John Edwards||S J Hammersley||||
|M Abbott|J Edwards||S Hammersley||||
|**Chairman**|**Finance Committee Chairman**||
**Chief Executive**||||
|Company Registration No: 07169875|||||||
The notes on pages 12 to 30 form part of these financial statements.
Page 10
**Consolidated statement of cash flows For the year ended 31 March 2022**
||**2022**|**2021**|
|---|---|---|
||**£000**|**£000**|
|**Cash flows from operating activities**|||
|**_Trading and donations_**|||
|Net income|**74**|550|
|Depreciation|**871**|885|
|Investment income included in investing activities|**( 654)**|( 361)|
|(Gain)/loss on disposal of fixed assets|**( 101)**|2|
|Donation of property|**-**|(1,130)|
|Realised losses/(gains) on disposal of investments|**16**|( 78)|
|Movement in fair value of investments|**256**|82|
|Net cash provided by/(used in) trading and donations|**462**|(50)|
|**_Working capital movements_**|||
|Decrease/(Increase) in housing stocks|**821**|( 863)|
|Transfers from stock to tangible fixed assets|**( 864)**|-|
|(Increase)/decrease in debtors|**( 827)**|66|
|(Decrease)/increase in creditors|**( 563)**|735|
|Net cash (used in) working capital movements|**(1,433)**|(62)|
|**Net cash (used in) operating activities**|**( 971)**|(112)|
|**Cash flows from investing and financing activities**|||
|**_Tangible fixed assets_**|||
|Payments on additions of tangible fixed assets|**(1,211)**|( 825)|
|Payments for land and construction of Middlefields House|**(1,132)**|(4,246)|
|Proceeds on disposal of tangible fixed assets|**985**|7|
|Net cash (used in) tangible fixed assets|**(1,358)**|(5,064)|
|**_Fixed asset investments_**|||
|Investment income received|**654**|361|
|Payments on additions of fixed asset investments|**-**|( 37)|
|Proceeds on disposal of fixed asset investments|**814**|3,336|
|Net cash provided by fixed asset investments|**1,468**|3,660|
|**_Financing activities_**|||
|Proceeds from new loans|**2,675**|-|
|Repayment of borrowings|**(1,035)**|-|
|**Net cash provided by financing activities**|**1,640**|-|
|**Net cash provided by/(used in) investing and financing activities**|**1,750**|(1,404)|
|Net cash inflow/(outflow)|**779**|(1,516)|
|Cash and cash equivalents at 1 April 2021|**2,623**|4,139|
|Cash and cash equivalents at 31 March 2022|**3,402**|2,623|
The notes on pages 12 to 30 form part of these financial statements.
Page 11
**Notes to the financial statements For the year ended 31 March 2022**
## **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.
Page 12
## **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 are comprised of 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 13
## **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 14
## **2. DONATIONS AND LEGACIES**
|**Unrestricted**
**Restricted**
**Funds**
**Funds**
**£000**
**£000**
Donations
**179**
**97**
Gift of net assets from other entities
**-**
**-**
Legacies
**28**
**958**
**207**
**1,055**
**3.**
**INCOME FROM INVESTMENTS**
**Unrestricted**
**Restricted**
**Funds**
**Funds**
**£000**
**£000**
Bank interest
**2**
**-**
Rental of investment properties
**-**
**68**
Overage receipt (note 28)
**-**
**584**
Dividends
**-**
**-**
**2**
**652**
**4.**
**INCOME FROM CHARITABLE ACTIVITIES**
**Unrestricted**
**Restricted**
**Funds**
**Funds**
**£000**
**£000**
Care fees
**3,732**
**7,300**
Housing income
**334**
**698**
Extra Care Housing lease sales
**493**
**523**
Covid-19 LA care grants
**-**
**558**
**4,559**
**9,079**
**5.**
**INCOME FROM OTHER SOURCES**
**Unrestricted**
**Restricted**
**Funds**
**Funds**
**£000**
**£000**
Gain on disposal of tangible fixed assets
**250**
**-**
Commercial trading operations
**6**
**-**
CBIL loan interest
**35**
**-**
Covid-19 grants: CJRS
**6**
**3**
**297**
**3**|**Total**
**2022**
**£000**
**276**
**-**
**986**
**1,262**
**Total**
**2022**
**£000**
**5**
**68**
**584**
**-**
**654**
**Total**
**2022**
**£000**
**11,032**
**1,032**
**1,016**
**558**
**13,638**
**Total**
**2022**
**£000**
**250**
**6**
**35**
**9**
**300**|**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|**Total**
**2021**
**£000**
731
1,130
521|
|---|---|---|---|
||||2,382|
|||12,274||
||||
**Total**
**2021**
**£000**
-
2
-
29|
||||31|
Page 15
## **6. EXPENDITURE ON RAISING FUNDS**
|**Unrestricted**
**Restricted**
**Funds**
**Funds**
**£000**
**£000**
Publicity and deputation
**22**
**3**
**7.**
**EXPENDITURE ON CHARITABLE ACTIVITIES**
**Unrestricted**
**Restricted**
**_Activities split by fund:_**
**Funds**
**Funds**
**£000**
**£000**
Housing
**408**
**687**
Care
**4,726**
**7,279**
Cost of Extra Care leases sold
**493**
**523**
Education and training
**143**
**-**
Raising awareness
**77**
**-**
General support costs
**235**
**41**
**6,082**
**8,530**
Depreciation and loss on disposal
**295**
**576**
**6,377**
**9,106**|**Total**
**2022**
**£000**
**25**
**Total**
**2022**
**£000**
**1,095**
**12,005**
**1,016**
**143**
**77**
**276**
**14,612**
**871**
**15,483**|**Total**
**2021**
**£000**
62
**Total**
**2021**
**£000**
985
11,228
654
209
109
360|
|---|---|---|
|||13,545
887|
|||14,432|
Page 16
## **7. EXPENDITURE ON CHARITABLE ACTIVITIES (continued)**
|**Extra care**
**Education**
**Raising**
**General**
**_Analysis by activity:_**
**Housing**
**Care**
**leases**
**& training**
**awareness**
**support**
**£000**
**£000**
**£000**
**£000**
**£000**
**£000**
Salaries and wages
**418**
**7,780**
**-**
**82**
**27**
**1,493**
Food
**99**
**504**
**-**
**-**
**-**
**-**
Administrative expenses
**29**
**301**
**-**
**13**
**2**
**572**
Repairs and maintenance
**215**
**748**
**-**
**-**
**-**
**-**
Heat and light
**68**
**284**
**-**
**-**
**-**
**-**
Other expenses
**103**
**446**
**-**
**48**
**48**
**1**
Cost of Extra Care leases sold
**-**
**-**
**1,016**
**-**
**-**
**-**
Professional fees
**-**
**137**
**-**
**-**
**-**
**181**
Governance costs: audit fees
**-**
**-**
**-**
**-**
**-**
**36**
Allocated administrative costs
**163**
**1,805**
**-**
**-**
**-**
**(2,007)**
**(**
**1,095**
**12,005**
**1,016**
**143**
**77**
**276**
Buildings depreciation
**171**
**493**
**-**
**-**
**-**
General depreciation
**22**
**154**
**-**
**-**
**31**
Loss on disposal
**-**
**-**
**-**
**-**
**-**
**-**
**1,288**
**12,652**
**1,016**
**143**
**77**
**307**
During the year the auditors were paid £23,000, including irrecoverable VAT, for non-audit services (2021: £14,000).
**Support costs (less allocated administrative costs):**
Staff costs
Depreciation
Loss on disposal
Professional fees
Other administrative expenses|**Total**
**2022**
**£000**
**9,800**
**603**
**917**
**963**
**352**
**646**
**1,016**
**318**
**36**
**39)**
**14,612**
**664**
**207**
**-**
**15,483**
**1,493**
**31**
**-**
**217**
**573**
**2,314**|**Total**
**2021**
**£000**
8,924
565
919
834
300
1,039
654
278
32
**-**
13,545
664
221
(2)
14,432
1,215
32
2
204
488
1,941|
|---|---|---|
Page 17
## **8. 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|**2022**
**£000**
**8,005**
**-**
**550**
**282**
**963**
**9,800**
**No**
**469**
**32**
**501**
**No**
**300**
**32**
**332**|**2021**
**£000**
7,226
25
484
273
916|
|---|---|---|
|||8,924|
|||
**No**
449
29
478
**No**
284
27
311|
The emoluments of three employees exceeded £60,000 in the year ended 31 March 2022 (2021: two). One of those employees earned between £60,000 and £70,000 and two earned between £80,000 and £90,000 (2021: 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 (2021: £nil). Travel expenses of £nil (2021: £nil) were reimbursed to 0 trustees (2021: 0 trustees) for items incurred wholly, exclusively and necessarily in the course of the charity’s activities.
The total aggregate remuneration of Key Management Personnel for the year was £464,078 (2021: £472,484).
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 £60,550 (2021: £59,815).
## **9. NET INCOME/(EXPENDITURE)**
|**NET INCOME/(EXPENDITURE)**|||
|---|---|---|
||**2022**|**2021**|
||**£000**|**£000**|
|This is stated after charging:|||
|Depreciation|**871**|885|
|(Gain)/loss on disposal of tangible fixed assets|**(250)**|2|
|Loan interest|**42**|-|
|Auditors’ remuneration for audit services|**36**|32|
|Auditors’ remuneration for other services|**23**|14|
Page 18
## **10. TANGIBLE FIXED ASSETS**
||**Freehold and**|**Assets in**|**Furniture,**||||
|---|---|---|---|---|---|---|
||**leasehold**|**the course of**|**fittings and**|**Motor**|||
||**properties**|**construction**|**equipment**|**vehicles**||**Total**|
||**£000**|**£000**|**£000**|**£000**||**£000**|
|**Cost**|||||||
|As at 1 April 2021|**32,152**|**4,919**|**1,860**|**105**|**39,036**||
|Additions|**646**|**1,132**|**542**|**23**||**2,343**|
|Disposals|**( 996)**|**-**|**( 118)**|**( 20)**|**(**|**1,134)**|
|Transfer from stock|**864**|**-**|**-**|**-**||**864**|
|Transfer|**6,051**|**(6,051) **|**-**|**-**||**-**|
|As at 31 March 2022|**38,717**|**-**|**2,284**|**108**|**41,109**||
|**Depreciation**|||||||
|As at 1 April 2021|**6,597**|**-**|**1,132**|**62**||**7,791**|
|Charge for the year|**664**|**-**|**181**|**26**||**871**|
|Released on disposals|**( 121) **|**-**|**( 109)**|**( 20)**|**( 250)**||
|As at 31 March 2022|**7,140**|**-**|**1,204**|**68**||**8,412**|
|**Net book value**|||||||
|As at 31 March 2022|**31,577**|**-**|**1,080**|**40**|**32,697**||
|As at 31 March 2021|25,555|4,919|728|43||31,245|
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**|**2022**
**2021**
**£000**
**£000**
**589**
584
**2,223**
2,078
**1,576**
1,552
**877**
877
**34**
34
**-**
652
**1,130**
1,130
**6,429**
6,907
**1,711**
903
**8,140**
7,810|**2022**
**2021**
**£000**
**£000**
**589**
584
**2,223**
2,078
**1,576**
1,552
**877**
877
**34**
34
**-**
652
**1,130**
1,130
**6,429**
6,907
**1,711**
903
**8,140**
7,810|
|---|---|---|
|||6,907
903
7,810|
Page 19
## **10. TANGIBLE FIXED ASSETS (continued)**
|**Pilgrim Homes Trust**
**Freehold property:**
Dorothea Court, Bedford
Leonora Home, Chippenham
Middlefields House 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**|**2022**
**£000**
**4,398**
**327**
**7,366**
**1,803**
**2,542**
**2,263**
**1,498**
**1,384**
**1,703**
**3,448**
**2,081**
**-**
**1,300**
**464**
**30,577**
**-**
**30,577**
**-**
**30,577**
**8,140**
**38,717**|**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|
|The net gain on disposal of tangible fixed assets for the year is made up of:||
|---|---|
||**£000**|
|_Pilgrim Homes Trust_||
|Gain on disposal of Land at Churston Ferrers|**180**|
|Loss on disposal of Crosfield Court, Watford|**(25)**|
|Loss on disposal of equipment, fixtures and furniture|**( 6)**|
||**149**|
|_Pilgrim’s Friend Society_||
|Gain on disposal of Florence House|**63**|
|_Strathclyde House Trust_||
|Gain on disposal of Flats 8 and 17|**38**|
||**250**|
Page 20
## **11. INVESTMENTS - GROUP**
|**Valuation**
As at 1 April 2021
Additions
Disposals
Revaluation
As at 31 March 2022
**Held by**
Restricted funds
**Historic cost**
As at 31 March 2022
**Investment properties comprise the following:**
**At market value:**
No’s 12 and 16 Harding Close, Redbourn (sold during the year)
House on Pilgrims’ Way, Great Finborough
60 Royd Court, Mirfield
90a Wood Lane, Chippenham
90 Wood Lane, Chippenham
92 Wood Lane, Chippenham
House on Liphook Road, Haslemere|**Investment**
**properties**
**£000**
**2,719**
**-**
**( 830)**
**( 256) **
**1,633**
**1,633**
**1,254**
**2022**
**2021**
**£000**
**£000**
**-**
830
**280**
238
**210**
199
**224**
324
**212**
308
**327**
475
**380**
345
**1,633**
2,719|
|---|---|
The investment properties were revalued at the open market value as at 31 March 2022 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 on sale of Redbourn flats|**( 15)**||
||Revaluation of investment properties|**(257)**||
|||**(272) **||
|**12.**|**INVESTMENTS – COMPANY ONLY**|||
|||**2022**|**2021**|
|||**£000**|**£000**|
||Investment in PFG Trading Ltd|**43**|43|
|||**43**|43|
Page 21
## **13. STOCK**
|**2022**
**£000**
Stock of flats held for resale (see below)
**1,780**
Preliminary costs of new building
**60**
Stock of books
**15**
**1,855**
**_Strathclyde House_**
**_Royd Court_**
**_Pilgrim Gardens_**
**Number**
**Cost**
**Number**
**Cost**
**Number**
**Cost**
**No**
**£000**
**No**
**£000**
**No**
**£000**
As at 1 April 2021
**16**
**1,281**
**5**
**613**
**5**
**709**
Sold
**( 5)**
**( 493)**
**( 4)**
**(523)**
**-**
**-**
**(**
Transferred to fixed assets
**(11)**
**( 864)**
**-**
**-**
**-**
**-**
**(**
Bought back
**4**
**414**
**5**
**643**
**-**
**-**
As at 31 March 2022
**4**
**338**
**6**
**733**
**5**
**709**|**2021**
**£000**
2,603
58
15
2,676
**Total**
**£000**
**2,603**
**1,016)**
**864)**
**1,057**
**1,780**|
|---|---|
## **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 by the charity at 31 March 2022 is £3.8 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 2022 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 £1.31 million.
## **14. DEBTORS AND PREPAYMENTS**
|**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|**2022**
**2021**
**£000**
**£000**
**315**
161
**116**
80
**111**
72
**60**
151
**2,150**
1,461
**2,752**
1,925||
|||
1,925|
## **15. CREDITORS AND ACCRUALS: amounts falling due within one year**
|**CREDITORS AND ACCRUALS: amounts falling due within one year**|||
|---|---|---|
|Short terms loans
Trade creditors
Taxation and social security
Other creditors and accruals|**2022**
**2021**
**£000**
**£000**
**425**
-
**152**
322
**127**
119
**1,060**
1,496
**1,764**
1,937||
|||
1,937|
Page 22
## **16. CREDITORS AND ACCRUALS: amounts falling due after more than one year**
## Bank loans
|**2022**|**2021**|
|---|---|
|**£000**|**£000**|
|**1,250**|-|
The bank loan is secured on Dorothea Court and Brighton properties. Interest on the bank loan is payable at 2.6% above base rate over the period until May 2027.
## **17. ANALYSIS OF NET ASSETS BETWEEN FUNDS**
|**General**
**Designated**
**Restricted**
**Total**
**Funds**
**Funds**
**Funds**
**Funds**
**£000**
**£000**
**£000**
**£000**
**_2022_**
**Fixed assets**
Tangible
**5,784**
**1,481**
**25,432**
**32,697**
Investments
**-**
**-**
**1,633**
**1,633**
Current assets
**2,512**
**441**
**5,056**
**8,009**
Current liabilities
**(1,744)**
**( 20)**
**-**
**( 1,764)**
Non-current liabilities
**(1,250) **
**-**
**-**
**( 1,250)**
Total Net Assets
**5,302**
**1,902**
**32,121**
**39,325**
**_2021_**|**General**
**Designated**
**Restricted**
**Total**
**Funds**
**Funds**
**Funds**
**Funds**
**£000**
**£000**
**£000**
**£000**
**_2022_**
**Fixed assets**
Tangible
**5,784**
**1,481**
**25,432**
**32,697**
Investments
**-**
**-**
**1,633**
**1,633**
Current assets
**2,512**
**441**
**5,056**
**8,009**
Current liabilities
**(1,744)**
**( 20)**
**-**
**( 1,764)**
Non-current liabilities
**(1,250) **
**-**
**-**
**( 1,250)**
Total Net Assets
**5,302**
**1,902**
**32,121**
**39,325**
**_2021_**|**General**
**Designated**
**Restricted**
**Total**
**Funds**
**Funds**
**Funds**
**Funds**
**£000**
**£000**
**£000**
**£000**
**_2022_**
**Fixed assets**
Tangible
**5,784**
**1,481**
**25,432**
**32,697**
Investments
**-**
**-**
**1,633**
**1,633**
Current assets
**2,512**
**441**
**5,056**
**8,009**
Current liabilities
**(1,744)**
**( 20)**
**-**
**( 1,764)**
Non-current liabilities
**(1,250) **
**-**
**-**
**( 1,250)**
Total Net Assets
**5,302**
**1,902**
**32,121**
**39,325**
**_2021_**|**General**
**Designated**
**Restricted**
**Total**
**Funds**
**Funds**
**Funds**
**Funds**
**£000**
**£000**
**£000**
**£000**
**_2022_**
**Fixed assets**
Tangible
**5,784**
**1,481**
**25,432**
**32,697**
Investments
**-**
**-**
**1,633**
**1,633**
Current assets
**2,512**
**441**
**5,056**
**8,009**
Current liabilities
**(1,744)**
**( 20)**
**-**
**( 1,764)**
Non-current liabilities
**(1,250) **
**-**
**-**
**( 1,250)**
Total Net Assets
**5,302**
**1,902**
**32,121**
**39,325**
**_2021_**|**General**
**Designated**
**Restricted**
**Total**
**Funds**
**Funds**
**Funds**
**Funds**
**£000**
**£000**
**£000**
**£000**
**_2022_**
**Fixed assets**
Tangible
**5,784**
**1,481**
**25,432**
**32,697**
Investments
**-**
**-**
**1,633**
**1,633**
Current assets
**2,512**
**441**
**5,056**
**8,009**
Current liabilities
**(1,744)**
**( 20)**
**-**
**( 1,764)**
Non-current liabilities
**(1,250) **
**-**
**-**
**( 1,250)**
Total Net Assets
**5,302**
**1,902**
**32,121**
**39,325**
**_2021_**|
|---|---|---|---|---|
|**Fixed assets**|||||
|Tangible|5,960|664|24,621|31,245|
|Investments|-|-|2,719|2,719|
||||||
|**Current assets**|2,249|1,602|3,373|7,224|
||||||
|**Current liabilities**
|(1,724)
|(213)|-
(|1,937)|
||||||
|**Total Net Assets**|6,485|2,053|30,713|39,251|
## **18. DESIGNATED FUNDS**
|**Brought**
**Net assets**
**Carried**
**forward at 1**
**gifted/**
**forward at 31**
**April 2021**
**Income**
**Expenditure**
**transfers**
**March 2022**
**£000**
**£000**
**£000**
**£000**
**£000**
**_2022_**
Strathclyde House Trust
**2,053**
**676**
**(827) **
**-**
**1,902**
**2,053**
**676**
**(827) **
**-**
**1,902**
**_2021_**|**Brought**
**Net assets**
**Carried**
**forward at 1**
**gifted/**
**forward at 31**
**April 2021**
**Income**
**Expenditure**
**transfers**
**March 2022**
**£000**
**£000**
**£000**
**£000**
**£000**
**_2022_**
Strathclyde House Trust
**2,053**
**676**
**(827) **
**-**
**1,902**
**2,053**
**676**
**(827) **
**-**
**1,902**
**_2021_**|**Brought**
**Net assets**
**Carried**
**forward at 1**
**gifted/**
**forward at 31**
**April 2021**
**Income**
**Expenditure**
**transfers**
**March 2022**
**£000**
**£000**
**£000**
**£000**
**£000**
**_2022_**
Strathclyde House Trust
**2,053**
**676**
**(827) **
**-**
**1,902**
**2,053**
**676**
**(827) **
**-**
**1,902**
**_2021_**|
|---|---|---|
|Futures Fund|199
218
(263)
(154)|-|
|Strathclyde House Trust|2,113
613
(673)
-|2,053|
||
||
||2,312
831
(936)
(154)|2,053|
Page 23
## **19. a) RESTRICTED FUNDS – PILGRIM HOMES**
|**19.**
**a) RESTRICTED FUNDS – PILGRIM HOMES**|||
|---|---|---|
|**Brought**
**forward at 1**
**_2022_**
**April 2021**
**Funds restricted by Pilgrim Homes articles:**
**£000**
_General unrestricted funds_
Pilgrim Homes Fund
**3,254**
_Designated Funds_
Operational Assets Equity Fund
**23,906**
Operational Risk Reserve
**1,030**
Property Emergency Repair Fund
**50**
_Total designated funds restricted by Pilgrim Homes articles_
**24,986**
_Pilgrim Homes Restricted Funds_
St Albans Home
**441**
Lucy McNeil Home
**1,849**
Homes Voluntary Support Funds (see note 19c)
**88**
_Total restricted funds restricted by Pilgrim Homes articles_
**2,378**
**Total restricted funds – Pilgrim Homes**
**30,618**
**19.**
**b) RESTRICTED FUNDS – GENERAL**
NYCC Grant
**1**
Faith in Later Life
**-**
Homes Voluntary Support Funds (see note 19c)
**8**
Local Homes Project Funds
**15**
Carey Gardens
**65**
Covid-19 LA Grants Fund
**-**
Dementia Fund
**6**
**Total restricted funds - general**
**95**
**Total restricted funds**
**30,713**|**Carried**
**Revaluations**
**forward at 31**
**Income**
**Expenditure**
**and transfers**
**March 2022**
**£000**
**£000**
**£000**
**£000**
**10,100**
**(8,548) **
**(1,392) **
**3,414**
**-**
**-**
**1,119**
**25,025**
**-**
**-**
**-**
**1,030**
**-**
**-**
**-**
**50**
**-**
**-**
**1,119**
**26,105**
**85**
**-**
**-**
**526**
**-**
**-**
**-**
**1,849**
**27**
**( 1)**
**2**
**116**
**112**
**( 1)**
**2**
**2,491**
**10,212**
**(8,549) **
**( 271) **
**32,010**
**-**
**( 1)**
**-**
**-**
**10**
**-**
**-**
**10**
**8**
**( 1)**
**( 1)**
**14**
**-**
**-**
**-**
**15**
**-**
**-**
**-**
**65**
**558**
**(558)**
**-**
**-**
**1**
**-**
**-**
**7**
**577**
**( 560)**
**( 1)**
**111**
**10,789**
**(9,109) **
**( 272) **
**32,121**||
|||**25,025**
**1,030**
**50**|
|||**26,105**|
|||**526**
**1,849**
**116**|
|||**2,491**|
|||
**32,010**|
|||**-**
**10**
**14**
**15**
**65**
**-**
**7**|
|||**111**|
|||**32,121**|
Page 24
## **19. c) RESTRICTED FUNDS – HOMES VOLUNTARY SUPPORT FUNDS**
||**Brought**||||**Carried**|
|---|---|---|---|---|---|
||**forward at 1**|||**Revaluations**|**forward at 31**|
||**April 2021**|**Income**|**Expenditure**|**and transfers**|**March 2022**|
|**_2022_**|**£000**|**£000**|**£000**|**£000**|**£000**|
|**Funds restricted by Pilgrim Homes articles:**||||||
|Chippenham|**3**|**-**|**-**|**-**|**3**|
|Great Finborough|**34**|**13**|**( 1)**|**13**|**59**|
|Evington|**15**|**5**|**-**|**( 2)**|**18**|
|Tunbridge Wells|**5**|**-**|**-**|**( 1)**|**4**|
|Wantage|**10**|**7**|**-**|**( 3)**|**14**|
|Shottermill|**20**|**2**|**-**|**( 5)**|**17**|
|Bedford|**1**|**-**|**-**|**-**|**1**|
|**_Total funds restricted by Pilgrim Homes articles_**|**88**|**27**|**( 1)**|**2**|**116**|
|**Other restricted funds**||||||
|Ernest Luff Care|**1**|**-**|**-**|**-**|**1**|
|Bethany Christian Home|**3**|**-**|**-**|**( 1)**|**2**|
|Emmaus House|**2**|**-**|**-**|**-**|**2**|
|Florence House|**2**|**-**|**-**|**-**|**2**|
|Kirby Muxloe|**-**|**5**|**-**|**-**|**5**|
|Middefields|**-**|**3**|**( 1)**|**-**|**2**|
|**Total Homes Voluntary Support Funds**|**96**|**35**|**( 2)**|**1**|**130**|
Page 25
## **20. a) RESTRICTED FUNDS – PILGRIM HOMES**
|**Brought**
**Carried**
**forward at 1**
**Revaluations**
**forward at 31**
**April 2020**
**Income**
**Expenditure**
**and transfers**
**March 2021**
**_2021_**
**£000**
**£000**
**£000**
**£000**
**£000**|**Brought**
**Carried**
**forward at 1**
**Revaluations**
**forward at 31**
**April 2020**
**Income**
**Expenditure**
**and transfers**
**March 2021**
**_2021_**
**£000**
**£000**
**£000**
**£000**
**£000**|**Brought**
**Carried**
**forward at 1**
**Revaluations**
**forward at 31**
**April 2020**
**Income**
**Expenditure**
**and transfers**
**March 2021**
**_2021_**
**£000**
**£000**
**£000**
**£000**
**£000**|**Brought**
**Carried**
**forward at 1**
**Revaluations**
**forward at 31**
**April 2020**
**Income**
**Expenditure**
**and transfers**
**March 2021**
**_2021_**
**£000**
**£000**
**£000**
**£000**
**£000**|**Brought**
**Carried**
**forward at 1**
**Revaluations**
**forward at 31**
**April 2020**
**Income**
**Expenditure**
**and transfers**
**March 2021**
**_2021_**
**£000**
**£000**
**£000**
**£000**
**£000**|**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:_||||||
|_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 19c)|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|
|
**20.**
**b) RESTRICTED FUNDS – GENERAL**||||||
|NYCC Grant|1|-|-|-|1|
|Faith in Later Life|41|84
(|125)|-|-|
|Homes Voluntary Support Funds (see note 19c)|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 26
## **20. 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 27
## **21. 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 last 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.
## _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.
Page 28
## **21. 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.
## **22. LEASING COMMITMENTS**
## _**Operating leases**_
The charitable company’s total future minimum lease payments under operating leases at 31 March 2022 were payable as set out below:
|as set out below:|||
|---|---|---|
||**2022**|**2021**|
||**£000**|**£000**|
|Within one year|**38**|95|
|Within two to five years|**84**|-|
||**122**|95|
|The operating lease charges for the year were:|||
||**2022**|**2021**|
||**£000**|**£000**|
|Land and buildings|**88**|85|
|Hire of plant and machinery|**85**|101|
||**173**|186|
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.
## **23. PENSION COMMITMENTS**
The pension cost charge represents contributions payable by the group to the pension funds. There were contributions of £49,000 due to the fund at the period end (2021: £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 £3,000 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.
## **24. 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 in 2019-20. At the year end there was £141,893 outstanding, which has yet to be invoiced.
Page 29
## **25. 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 £400,000. The Pilgrim Friends Group has no plans to dispose of Strathclyde House.
## **26. RELATED PARTY TRANSACTIONS**
Details of trustees' and key management personnel and remuneration are disclosed in note 8 to the financial statements.
## **27. 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.
## **28. 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 £584,000 (2021: £195,000) which has been recognised as income in the statement of financial activities. This is the final amount to be received under the terms of the agreement.
## **29. CHURSTON FERRERS OVERAGE**
The sale of the land at Churston Ferrers included an overage agreement stating that Pilgrim Homes Trust will receive payment if planning permission is granted on the land disposed of within the next 30 years.
## **30. 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.
## **31. POST BALANCE SHEET EVENTS**
The group acquired the trade and net assets of Koinonia care home and Melbourne Hall Home Trust from 1 April 2022. Melbourne Hall has closed as a care home and the property is now on the market. Koinonia is a care home in Worthing, which will be run by Pilgrims’ Friend Society.
The Leonora care home plus the three neighbouring investment properties in Chippenham have been put up for sale for £1,280,000.
Page 30
**Statutory information**
## **DIRECTORS AND TRUSTEES**
Alan Copeman (Chairman until 31 March 2022) Bryan Jarvis (Vice-Chairman) John Edwards Andrew Symonds (Vice-Chairman) Michael Abbott (Chairman from 1 April 2022) Sheila Warnes Max Robinson Robin Turnbull Genefer Espejo Philip Oliver Dr Judy McLaren
## **COMPANY SECRETARY**
Debbie Buggs
## **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_ Debbie Buggs _Director of Finance and Company Secretary_ Andy Walsh _Director of Property Services_ Joshua Field _Director of Human Resources_ Alexandra Davis _Director of Marketing_
Page 31
**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 2022 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:
- give a true and fair view of the state of the group’s and of the charitable company's affairs as at 31 March 2022 and of the group’s incoming resources and application of resources, including the group income and expenditure, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **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**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the trustees’ report, which includes the directors’ report and the strategic report prepared for the purposes of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the directors’ report and the strategic report included within the trustees’ report have been prepared in accordance with applicable legal requirements.
## **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 or the strategic 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:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
## **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:
- accounting measurements of property
- disclosure of capital commitments or provisions
- recognition of legacy income
- fraudulent extraction of cash
- government grants
In response to the risks identified we designed procedures which included, but were not limited to:
- reviewing third party evidence of investment property valuations
- agreeing financial statement disclosures to underlying supporting documentation
- identifying and reviewing journal entries
- discussions with management and review of legal correspondence
- reviewing Trustees’ meeting minutes
- evaluating the charity’s internal controls
- testing the calculation of claims made under Coronavirus grants
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.
## P Newton
**Paul Newton FCA (Senior Statutory Auditor) for and on behalf of Jacob Cavenagh & Skeet**
**Chartered Accountants Statutory Auditor**
Date: 25 July 2022
5 Robin Hood Lane Sutton Surrey SM1 2SW
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