Registered number 07568820 Charity number 1143234 Registered So¢ial Landlord number A0513 JOHN BOWLEY AND SHERWOOD ALMSHOUSES IA COMPANY LIMITED BY GUARANTEEI REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 JOHN BOWLEY AND SHERWOOD ALMSHOUSES CONTENTS Page Legal and administrative inforynation Trustees, report Independent auditor$' report 10-12 Slalement of comprehensive income 13 Statement of ehanges In reseNes 14 Statement of financial posi(ion 15-16 SL*em&nl of cash flows 17 Notes lo the flnancial statements 18-26 JOHN BOWLEY AND SHERWOOD ALMSHOUSES LEGAL AND ADMINISTRATIVE INFORMATION Company registration number 07568820 Charity registration number 1143234 Charlty Ilnked by uniting directlon 210959 Trustees Cllr R Wallace Mrs R l Braid Mr T S McNeice Ichaimianl Cllr R West Mr N Jones Cllr P Bingham Cllr R Shoob Mr D Burton Mrs J Todd Mrslnd Mrs M Lawes (resigned 10111120251 Cllr L McGirr lappoinled 22101120261 Company secretary Mrs T Pearson Scheme manager Mrs T Pearson Reglstered office Henwood House Henw¢xJd Ashfor Kent TN24 80H Banker¥ CAF Bank 25 Kings Hill Avenue Kings Hill West Malling Kent ME19 4JQ Audito Magee Gammon Corporate Limitgd Henwood House Henwood Ashford Kent TN24 8DH Page I JOHN BOWLEY AND SHERWOOD ALMSHOUSES TRUSTEES. REPORT (continued) FOR THE YEAR ENDED 31 DECEMBER 2025 The trustees present their report and financial statements for the year ended 31 December 2025. Constitution The John Bowley and she￿(￿)d Almshouses Charity Icharily number 2109591 was constf(uted under a scheme document dated 14 March 2007. During the year ended 31 December 2012, the trustees undertook the process of incorporation and all assets and liabilities of the charity, except those relating to donations made under pemiangnt endowment, were transferied to the new corporate body (company Tegistralion number 07568820}. The corporate charity, also known as John Bowley and SherwcKJd Almshouses. was registered with the Charity Commission and issued with a new charity number, 1143234. John Bowley and SheM¢)od Almshouses (charity number 1143234) is ¢onstiluled under ? Memorandum of A$socialion dated 17 March 2011. The a8sets d￿ated lo John Bowley and she￿￿1 Almshouses {ch8rity number 2109591 under pemianent endowment remain in that chari(y. Under a uni(ing direction, John Bowley and Sherwood Almshouses (charity number 210959) is linked to John Bowley and SheNood Almshouses Icharily number 114323418S constiluenl charty Icharsty t)umber 1143234-). The financial ststemenls therefore iefiect the financial transactions relating lo both charilÈs. The John 8owley and Sherw¢))d Alm5hou$es is a Registered Social Landlord. Trustses and Governance The chartty is overseen by the trustees, who meet al least four times a year. They make all decisions regarding the conduct of the charity bul the day-l04ay administration is undertaken by the scheme managef. Resident representatives from John Bowley House and the Sherwt)od Trust Homes attend the quarterly trustees. meetings. The trustees who served during the year were as follows-. Mrs Rosemary Braid Ico-QPtedl Mr Thomas mcNe1￿ Ic<>OPtedl Cllr Rogof Wgst" Cllr Richard Wallace. Mr Neil Jones {co-OPtedl Cllr Paul Bingham . Mr David Burton {cc>-OPtedl Mrs Jennrfer Todd {co-opledl Mrs Mary Lawes . (resigned 1011112025) Mr Stsphen Ind l¢o-opled} Cllr Rebecca Shoob (co-opted) Cllr L McGirr' {COwOPted} Appolntment of trustggs Under the Memorandum of Association dated 17 March 2011, the minimum number of Iruslees permittfjd is four, bul thoro is no maximum. The Iwstees and members las defined in the Memorandum of Associalionl have the power lo appoint new trustees. There We￿ four nomin*ed trusleos (marked ' above} appointed by Folkestone Town Council, although there was no requirement for them to be town councillors. There were eight co-opted truste8s appointed by the trustee$. On joining the board, trustee5 are given copies of the Memorandum of Association. the Scheme Document, Good Govemance A code for the Communty and Voluntary Sector and minutes of re￿nt Iru5tees' meetings. Page 2 JOHN BOWLEY AND SHERWOOD ALMSHOUSES TRUSTEES. REPORT (continued) FOR THE YEAR ENDED 31 DECEMBER 2025 Membership of the trustee body is reviewed annually as per the Charty Govemance Code adopted in Ju 2024. As por the Memorandum of Association 500h of the tru$lees sto¢Jd down at the October 2025 meeting and all agreed lo re-stand. Mtscondu¢t The trustees have no financial interest in the conduct of the charity. Other interests, which may arise from lime lo time, such as the appointment of a relative of a trustee as a resident, are provided for in detailed Regulations that are reviewed and approved by The Regulator for Social Housing. All affairs and transactions of the trustees are open lo public scrutiny with the exception of the personal affairs of res*Jents. All accounts are prepared and scrulinised by qualified accountants and independent auditors. Objectlves of the charlty forthe public bengfrt The objectives of the charty are the provision of housing ate¢Jmmodatiori for persons in need, hardship or distress residing or having immediate family residing in or near Folkeslone, with a preference for those who are members of the Church of England. Those parsons in need may be individuals of either sex, or 8 couple wilhoul discrimination towards civil partnerships. The trustees confirm that thoy have referred lo the advice contained in the Charty Commission's general guidan￿ on public benefrt when reviewing the charity's aim and objectives, and in p18nning future activities. Achlevements and Performance In the year and Future Plans A. Achiovement and Perfonnance 2025 al Summary The John Bowley and Sherwood Almshouses has continugd lo provide affordable well- maintained accommodation for its residents. Demand for the properties remained htgh not only because of the excessive Cost of renting in the private sector but because the properties are well appointed and located. The voKJs figure for year conseqLtentty was only 3.36 %. despite 3 vacancies. During the year. the Iruslees addressed repair work identified in the 2023 Quinquennlal Inspections arKI other official reports. overall spending £23,000 on improving stock. Two PToperties were updated when they became vacant and fv40 dated bathrooms were modernised into modern shower rooms lone with the aid of a Disabled Facilities Grantl. The trustees also focussed on properties showings signs of mould and damp. Works included.. venting kf(cher¢ extractors lo outside.. swapping older style bathroom extractors lo humidistat extractors,. updating heating in empty properties,. upgrading older style double glazing which is prone to condensation., provision of dehumidrfiers,. provision of lemperalurelhumidty sensors,. the removal of two raised beds bordering the rear of the bungalows- and the provision of extra insulation in the rear porch of bungal¢)w 2. bl Operational Managemenl Flnancial Management and Regulatory Framework The trustees reviewed the running of the charity in response to the increased regulatory changes that had affected the administrative wotkload during the year for the Scheme Manager and trustees. Metroline look over the weekly and mot)thly fire safety cheeks at John Bowley House. The trustee5 introduced service ¢harges that were recoverable through Housing Benefft to replace Intensiv8 Housing Management. cl Communlty Worklng The Charity conlinued working with local organisation like 'lncredibk Edible Cheriton and Broadmead,, 'Hythe Hops,, 'Cheriton Christmas Lights, and 'The District Food Nelwork,. Residents continued lo participate in the decision making bohind the charity by attending trustees, meeting and holding a residents, meeting. Page 3 JOHN BOWLEY AND SHERWOOD ALMSHOUSES TRUSTEES. REPORT (continued) FOR THE YEAR ENDED 31 DECEMBER 2025 d) Complalnts and Wlder Leamlng from Complaints 2025 The trustees addressed two complaints from residents during the year. Retrospectively these should have been treated as antisocial behavtour. B. Plan6 for 2026 l) Bulldlngs The program of works to replace fauty double-glazed windows will conlinlte as needed to cut draughts and reduce overall healing costs. Money will be held in reserve lo improve the properties as vacancies arise. The chimneys al the Sherwood Bungalow8 will be capped. re•poinled and vented. The trustees wll continue lo ensure wommgndations in the Quinquennial Inspections a addressed. The dated storage healers al John Bowl2y House will bg replaced as and when they fail with high heat retention 5tor8ge heaters. This is the only option open lo trustees to ensure EPC ratings don't drop. 11) Community Links and Environment The Trustees will continue working with the organisers of the District Food Nefv￿rk, the Cheriton Lights Festival. the Cherbton Christmas lights, Hythe Hops and 'lncredible Edible Cheriton and Broadmead,. Residents, meetings wtll be booked as required. The Trustees will continue to support Folkeslone and Hythe District Council mainlaSning the land adjacent lo the bungalows for the benefit of wildlrfe. The trustees will continue to look al measures to increase water calchmenl 8t the properties. Flnanclal revlew The charlty Is mainty funded by the weekly maintenance contributions receNable for the letting ol the Melve als al John Bowley House, and the four bungalows al Sherwood Trust Homes. The lolal weekly maintenance contributions received during the year amounted to £133,373 an increase of £17.084 over the prior year. John Bowley House weekly maintenance contributions al the end of the year sl¢Jod at either £146.86 or £136.46 per week for each of the eight single bedroom flats, and £150.24 for each of the four two-bedroom als. For She￿￿0d Trust Homes, the weekly maintenance contributions for each of the four bungalows al the end of the year stood at £139.36, 136.46. 146.86 and 122.84 per week (depending on the propetyl. These figures exclude Ihe'setvice Charge, Inon-rent e￿Ment) charge subsidized from Housing Benefft. The Trustees d￿lded to charge service charges from 114125. This was on top of the Weokly Maintenance Charge IWMCI. These charges relate to items of a communal nature such as staff or part of staff employed al the scheme, maintaining communal areas, such as gardens, laundry rooms and shared lounges. Lifeline is provided lo all the properties. The residents paid around £5-£8 per week in Intensive Management fees {depending on the property) prior to 114125, this Gharge no k)nger applies. The new service charge is often covored by Housing Benefrt. for iesidents on low incomes. The income from this will be used to fund improv&mants to properti$s and fund other costs. The charity is facing costs arising from increased regulation from the govemmenl and more than inflation increases in contractors, costs. Ptye4 JOHN BOWLEY AND SHERWOOD ALMSHOUSES TRUSTEES. REPORT (continued) FOR THE YEAR ENDED 31 DECEMBER 2025 Pollcy on reserves In accordance with the formal reserves policy, the charty sets aside money in an exiraordinary rep8lr fund and a cyclical repair fund. Reserves are being held to pay for any large. unexpe¢led building costs, such as window upgrados, updating heating system5 and measur&s required lo combat climate change. The charity maintains reserve funds to meet unforeseen expendf(ure al least equivalent lo one month's income. As balances pemiil, r( seeks to add to its funds, which are invested in appropr¢ale stocks in accordance with the National Scheme for Almshouses to meet long leTm c8Pltal replacement costs. The Trustees will aL80 Put aside funds in short term bonds. Investment pollcy The charity maintains no investments other than those referred to under the"Policy on Reserves" MaJor risks The charity provides Almshouse buildings, which are usualty occupied fully by residents that it appoints in accordance wf(h the criteria laid down. Risks are those typically associated with the buildings, Ih¢)se arising from the conduct of its appointed residents, and those from the misconduct ol the administrator. the scheme manager and the trustees. In these matters, the Iruslees are subject to regulaliorj and annual scrutiny by The Regul*or for Social Housing. the Charty Commission and the Housing Ombudsman. Buildlng rlsks The charty has comprehensive insurance cover to provide for risks to the fabric of the buildings and the replacement of fixtures and fittings damaged. other than by normal wear and tear, along with speci insurance cover for the scooter shed at John Bowley House. Th@ quinquennial inspection was undertaken in 2023 and the insurance is kept under review. The tnJsle8s' insurances include cover for legal ¢osts arising from actions which may be brought against them and risks to third parties. Resld8nts' rlsks On appointment. residents are required to sign an agreement, in a form common to Almshouses in the United Kingdom, setting out the limits ol their personal liabiljty and restrictions on their use of Ihe propety so that the interests of the trustees and other residents may be prot¢Gted. Residents are advised to take out Insuran￿ for their own belongings. In more recent years one of the major risks is from residents who are incre85ingly frail or who have dementia. The John Bowley and Sherwood Almshouses do not have the resources to care for people as they become frailer and support for these people in the Community is limited. Value for Money (VFM InlroduGtion This report sets out our VFM performance looking back over 2025 and provides our VFM targets going fotward. 11 aims to provide the reader with a transparent account of how we are striving to mak¢ the most of the resources al our disposal in the pursuit of our strategic objectwes. We positively ¢n¢ourage feodback and challenge from our customers and other stakeholders on our VFM performance. The report is slruclured lo meet the fequlrements of the RSH'S VFM stsnd8rd w¢th which we must compty as Registered Provider. Page S JOHN BOWLEY AND SHERWOOD ALMSHOUSES TRUSTEES, REPORT (continued) FOR THE YEAR ENDED 31 DECEMBER 2025 l Our corporate objective5 & how Twe measure succoss Our slralegic objectNes aim to deliver our social purpose. The objectives therefore reflect the value we are seeking to maximise in the context of VFM. To measLtre our success. we have sel metric5 against our objectives: Provide good quality, safe, securo houslng Improvement to EPC ratings IE requirement by gov$mment) Response time for Emergency repairs {within 24 hours} Health and safety compliance metrics (Gas safety checks, LOLER inspectiC￿$, fixed wiring hecks, PAT testing, fire alami leslsl lifeline checks and rectifying problems) Affordable weekly maintenance charges compared to markel rentals Ensure properties are free from mould and damp Support Dlgnlty and Independence Number of residents Ilving independently in the almshousos. NumbeT of residents maintaining their independence wtth the aid of families and carers. Residents, views considered and Resident involvement in decision making via attendan¢0 at trusteos, meetings and residents, meetings. Community Investment-rnaking communities work by improving the local quallty of Ilfe o Active involvement in communty events o Resident satisfaction surveys o Feedback from partner organisations Our approach to Investment Key corstextual considerations frame our approach to investing in our obj&tives. They include.. The residents of the John Bowley and Sherwood Almshouses are all aged 60 or over. Safety of residents is paramount, and trustees work tirele$sty to ensure the buildings are well maintained and sale. There is a high deman(f for social housing in the area, beeause the weekty charges aro Ofton lower than the market rents for comparable properties and in many cases the weekly mainlenanee charges are covered fully by Housing Benefit. Maintaining a list of suppliers and contractors who offer a good servtce and value for money can be a challenge. Residents feedback abouv requests for long lemi repairs is nomially considered at trustees, meetings, wlh residents, representatives in attendanca. The charty holds limited reserves for emergencies- so only limf(ed large scale projects can be implemented annually. Appertaining to these considerations, our approach to investing in our objgclives is as follows.. a) To maintain existing stock and services. b) Ensure the safety and security of residents and properties. c) Regularly review and implement environmentsl measures to reduts C02 emissions and use of ham)ful products. Page 6 JOHN BOWLEY AND SHERWOOD ALMSHOUSES TRUSTEES, REPORT (continued) FOR THE YEAR ENDED 31 DECEMBER 2025 a. Measurlng VFM Our strategic success measures above are key to us understanding our value as expressed by outPLts and outcomes. However, to fulty undetstand VFM, we use a wider set of indicaloTS. 11 helps us understand not only what we are achieving bul how well the delivery system is working. 11 incorporate5 our strategic metrics 8nd targets, as well as RSH metrics. b. VFM compared to global metrics 2025 Metrlc RSH Metrlcs Actual 2025 Target 2026 Global accounts 2025 7.5% Reinvestment % New Supply Delivered % yes yes 0% New Social Housing Supply yes 1.6% New Non- Social Housing Supply Gearing %-Debt as a % of Assets EBITDA MRI Interest Cover % yes 0.2% yes 0% 45.5% yes Oyo 112.9% Headline Social Housing Cost per Unit Operating Margln % Social Housing Operating Margln %- Overall Return on Capltal Employed {ROCE) % WMC increases (including service charges) Rent Loss from Voids Bad debts for the year Resident Arrears Turnover RSL EPC Rating'c, and above Resident Partlcipation in Decislon Making yes £9,211 £8,382 £5,688 yes 8.4% 0.2• 20,0% yes yes 8.4% 1.2% 0.2% 0.0% 17,4% no 20.59% 25% no no £nil £nil no no £133,373 93.75% £113,550 93.75% 50% no no Page 7 JOHN BOWLEY AND SHERWOOD ALMSHOUSES TRUSTEES, REPORT (continued) FOR THE YEAR ENDED 31 DECEMBER 2025 Our VFM perfom)ance In 2025 The VFM dashboard in S￿110n 4 idenlifRs the VFM targets for 2025 against our strategi¢ objecb'ves. Overall. the charity performed well against global account metrics. The charity uses ils resources to maintain the properties lo the Decent Homes Standard rather than acquirirtg new units and this strategy is unlikety lo change in 2025. Most income is derived from Housing Benefit and paid direct to the landlord. 11 will be difficult to make any improvements lo EPC ratings, other than by replacing dated storage healers with hKJh heat Tetention storage healers as Suggested on the latest EPC certrficales. Residents continue lo be invi(ed lo trustees, meetings. John Bowley House 15 represented bul due lo age and health of residents the bungalows are not. VFM taryets 2026 Our forward tsrgets are set out in the tab￿ al seetion 4b. Raising EPC targe15 will be dependent on the cost and reliabilty of rwi technology as well as the opportunty lo relrofrt properties when they are vacant. Statement of Trustees. Responslbilities Thg registered housing legislation requires the trustees to prepare financial slalements for each financial year which give a true and fair view of the stste of affairs of Ihe charity and of the surplus or deficit for that Pgriod. In preparing these financial statements, the trustees are required lo.. select suitable accounting poltcies and then apply them Consistent￿., makejudgements and estimates that are Teasonable and prudent,. slate whether applicable accounting standards have been followed. subject to any materi81 departures dssctosed and explained in the financial statements,. and prepare the financial slalements on the going concem basis unless it is inappropriate to presumo that thg Gharily will continue in business. The trustees are responsible for keeping proper accounting records which disclose wilh reasonable accuracy at any time the financial posrtron of the charity and enable il lo ensure that the financial slalemenls comply with the Housing and Regeneration Act 2008 and The Accounting Direction for Social Housing in England from April 2015. The trustees have general responsibility for taking reasonable steps to safeguard the assets of the chanty and to prevent and delect fraud and other irregularities. The trustees are responsible for the maintenance and integrity of the corpordte and financial information included on the charity's website. Legislation in the United Kingdom governing the preparation and dssseminalion of financlal statements may differ from legislation in otherjurisdictions. Ptye8 JOHN BOWLEY AND SHERWOOD ALMSHOUSES TRUSTEES, REPORT (continued) FOR THE YEAR ENDED 31 DECEMBER 2025 statement of disclosure of infomiation to auditors We, the trustees of the ¢harity who held office al the date of approval of these finan¢ial sl8lemenls as Set out abovo oach confirm, so far as we are aware, that.. there Is no relevant audit information ofwhlch the charity's auditors are unaware,. and we have taken all the steps we ought lo have taken as trustees in order lo make ourselves aware of any relevant audit infomialion and lo establish that the charity's audrtors are aware of that information. This report has been prepared having taken advantage of the small companies exemption in the Companigs Act 2006. The Trustees, Report was approved by the trustees and signed on their behalf by.. Mr T S McNelce Trustee Mrs R l Braid Trustee Date.. ..%l...&L4* P4e9 JOHN BOWLEY AND SHERWOOD ALMSHOUSES INDEPENDEiYf AUDThOR'S REPORTTO THE TRusfEES OF JOHN BOWLEY AND SHERWOOD ALMSHOUSES (continued) Opinion We have audited the financial statemen15 of John Bowley and She￿ood Almshouses Ithe 'charty'l for thg year ended 31 December 2025 which comprise the statement of comprehensive income. the slalement of changes in reserves, the statement of financial position, the slalemenl of cash flows and the related notes. The fin8nctal 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 appli¢eble in the UK and Republic of Irel8nd' Iunited Kingdom Generally A¢cept8d Accounting Praclicel. The financial slalements have been prepared in accordan￿ with The Accounting Direction for Private Registered Providers of Social Housing from April 2015 and the Slalement of Recommended Practicè ISORP} Accounting by registered social housing providers lupdaled 20181. This has been done in order for the accounts to provide a true and fair VEW in accordance wrth the Generally Accepted Accounting Practice effective for reporting periods beginning on or after 1 January 2019. In our opinion the financial ststemenls.. gNe a true and fair view of the state of the Chari￿$ affairs as al 31 December 2025, and of ils incoming Tesources and application of resources, including its income and expendf(ure, lor the year then ended.. have been propedy prepared in accordance with United Kingdcwn Generally A¢¢epted Accounting PraGli¢e.' and have been prepared in accordan￿ wilh the Charities Act 2011, the Housing and RegeneralKJn Act 2008 and The Accounting Direction for Social Housing in England from April 2015. Basls for oplnlon We conducted our audit in accordance with Intemational Standards on Auditing (UK) IISAS (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors. responsibilities for the audit of the financial ststements section of our report. We are irsdependent Df the charity in accordance with the ethical requirements that are relevant lo our audit of the financial slalements in the Uni(ed Kinodom. including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical re5ponsibilrf(ies in aecordance with these requirements. We believ8 that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Concluslons relatlng to golng concem We have nothing to report in respect of the followlng matters In relation to which the ISAS (UK) require us to report to you where: the trustees, use of the going concern basis of aeeounting in the preparation of Ihe financial slalemenls is not appropriate,. or the trustees have not disclosed in the financial statements any Klentifyad matenal uncertainties that may cast signrficanl doubt about the ¢h8rity's ability to continue to adopt the going ¢oncem basis of ounting for a period of at least Iwelve months from the dale when the financial statsmenls are authorised for issue. Other infomiatlon The trustees are responsible for the other information. The other infomialion comprises the infom)alh)n included in the Annual Report, other than the financial statements and our Auditors, Report therec)n. Our opinion on the financial statements dces not cover the other infomialion and, except lo the extent olheTwise explicf(ly slated in our report, we do not express any fom of assurance conclusion thereon. Page LO JOHN BOWLEY AND SHERWOOD ALMSHOUSES INDEPENDENT AUDrroR'S REPORTTO THE TRUSTEES OF JOHN BOWLEY AND SHERWOOD ALMSHOUSES (continued) In connection with our audÉ of the financial statement$, our responsibilty is lo read Ihg other inforynation and, in doing so. consider wh¢lh¢r the other infomialion is materially inconsisl&nt with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misslaled. If we Klentify such material inconsistencies or apparent material misslalemenls, we are required to detennine whether there is a material misstslemenl in Ihe financial statements or a mateTial misslalement of the other infomation. If, based on the work we have performed. we conclude that there is a material misstslemenl of this other information, we are required to report that fact. We have nothing to report in this regard. Matters on which we are required to report by exception We have n¢)thing lo report in respect of the following matters where the Charitie5 (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion.. the information given in the Trustees, Report is inconsislent in any material Tespecl with the financial statements: or sufficient aceounting records have not been kept.. or th8 finarKial statements are not in agreement with the accounting record5 and retums.. or we havo not recewed all the infomatv)n and explanations we require for our audit. In addi(ion, we have nothing to report in respect of the following matter where the Housing and Regeneration Act 2008 requires us lo report lo you if, in our opinion.. a satisfactory system of control over transactions ha5 not been maintained. ResponslbllFtles of trustees As explained more fully in the statement of trustees, responsibilities set out on page 8, the Iruslees are responsible for the preparation of the financial statements and for being satisfied that they gwe a tTue and fair view and for such internal control as the trustees dot¢mine is necessary lo enable the preparation of financ￿1 statements that are free fiom material misstatement. whether due to fraud or error. In preparing the financial stalemenls, the Iruslees are responsible for assesslng the Charity's abilty lo ontinue as a going con￿rn, disclosing, as applicable, matteTS related to going Goncern and using the going concern basis of accounting unless the directors either intend to liquidate the Charty or to ceaso 0porat￿nS. or have no realistic allemative bul to do so. Audltors. responslblllties for the audit of the financial $tatgments Our objectives are to obtain reasonable assurance about whether the financial slalements as a whole 218 free from material misstatement, whether due to fraud or effor, and lo issue an Auditors. Report that includes our opinion. Reasonable assurance is a high level of assurance bul is not 8 guarantee that an audit conducted in accordance with ISAS IUKI will s￿¥8Y5 delècl a materFal misslatemenl when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggfegale. they cotjld reasonably be expected to irfuence the economic de¢i5i0ns of users taken on the basis of these financial staloments. Irregularilie5, including fraud, are inslanees of non4ompliance wtih laws and wulations. We design procedures in line with our responsibilities. outlined above. to detect material misstatements in respect of iNegularilies. including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed bekw4'. Page 11 JOHN BOWLEY AND SHERWOOD ALMSHOUSES INDEPENDENT AUDrroR'S REPORT TO THE TRUSTEES OF JOHN BOWLEY AND SHERWOOD ALMSHOUSES (continued) Capablllty of the audlt In detecting Irregularities Includlng fraud Based on our understanding of the Charity, we have considered those laws and regulations that have a direct impact on the preparation of the finaneial staemenls such as tho Charities Act 2011. We evaluated management incentives and opportunities for fraudulent manipulation of the financial slalemenls including management override, and considered that the principal iisk was related to the posting of inappropriate joumal entries to improve the result before tax for the year. We designed audrf( prO￿d￿re5 to respond lo the risk, r￿QgnISIng that Ihe risk of not delecling a material misstatement due lo fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by. for example. forgery, misiepresentations or through collusion. Procedures performed by the audlt team Include¢J'. Discussions with management regarding known or suspected Instan¢es of non