Company registration number: 10671707 Charity registration number: 1172246
ARC Healthcare Southwest
(A company limited by guarantee)
Annual Report and Financial Statements
for the period from 1 December 2021 to 31 May 2023
ARC Healthcare Southwest
Contents
| Contents | |
|---|---|
| Reference and Administrative Details | 1 |
| Trustees' Report | 2 to 8 |
| Independent Examiner's Report | 9 |
| Statement of Financial Activities 10 to 11 |
|
| Balance Sheet 12 to 13 |
|
| Statement of Cash Flows | 14 |
| Notes to the Financial Statements 15 to 29 |
ARC Healthcare Southwest
Reference and Administrative Details
Trustees
A M Rouncefield J M Storer S Visram M Gorman resigned 7 January 2023 J Herrod resigned 2 September 2023
Senior Management / Leadership Team
J Sabien, Outsourced Consultant
Charity Registration Number 1172246
Company Registration Number 10671707 The charity is incorporated in England
Registered Office
Waterside Court Falmouth Road Penryn Cornwall TR10 8AW
Accountants
GW & Co. Limited Chartered Certified Accountants and Business Advisers Waterside Court Falmouth Road Penryn TR10 8AW
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ARC Healthcare Southwest
Trustees' Report
The trustees, who are directors for the purposes of company law, present the annual report together with the financial statements and auditors' report of the charitable company for the period ended 31 May 2023.
INTRODUCTION - A PERIOD OF SADNESS
The period to May 2023 was a sad time for the Charity. With increasing losses and a lack of commitment from the NHS to use our services, the Trustees had to take the difficult decision in December 2022 to close the charity before it ran out of money. In January 2023, all staff, including the founder and Chief Executive, Joseph Sabien were made redundant. Assets were sold, including the Dutch Barge known as the ARC (Andere Boerge), debts were collected, and liabilities paid.
The original intention was to liquidate the charity and use any surplus funds for other charitable purposes. However, it became evident later in 2023 that there was a significant demand in Cornwall for the mental health services offered by the Charity, and a decision was taken to investigate re-starting it, using the same charitable entity. To avoid confusion, having announced the closure of Sea Sanctuary, it was decided to change the name of the charity to ARC Healthcare Southwest (“ARC HSW”) and this occurred on 5th October 2023.
Funding for two years from the National Lottery was confirmed in December 2023, and a decision was made to re-commence activities on a smaller scale in early 2024, fronted again by Joseph Sabien.
THE CHARITY MOVING FORWARD
Between July 2019 and January 2023, ARC HSW worked in partnership with the Devon & Cornwall police to provide a unique county-wide service. The service had a specific police call-sign (G999) and operated out-of-hours, typically between 1800-0600, responding to emergency calls where mental ill health (people presenting in acute mental health distress) had been identified. G999 provided crisis negotiation (e.g. people in the process of attempting suicide) and thereafter, once removed to safety, assessment and treatment was provided.
During the 3.5 years of operation, data capture highlighted the need for an additional service in the county – a service that would specialise in the treatment of trauma-related illness and mental health disorders. Four main features for people in crisis became apparent:
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They felt disconnected to other people and the community in which they lived.
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They lacked social interaction and were not engaged in meaningful activities.
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They wanted to better understand their mental health, to better understand and improve their
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• emotional threshold and be taught useful techniques for the purpose of self-soothing/emotional regulation.
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They wanted specific treatment for their trauma (e.g. EMDR) once stable and out of crisis.
As a direct consequence of this service analysis, ARC HSW has decided to concentrate its efforts on supporting this particularly vulnerable and often marginalised cohort. This will be achieved by way of the development of a trauma service which will concentrate on providing the following services:
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assessment of need – a root cause assessment
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meaningful activities (e.g. creative writing, exercises classes, art facilitation and outdoor ‘process’ groups
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EMDR and trauma related modalities (where appropriate)
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ARC Healthcare Southwest
Trustees' Report
It should be noted that people in receipt of support from ARC HSW will not present in crisis as this remains the remit of NHS primary care services. As such, ARC HSW will not provide a crisis service and will carefully triage and monitor all referrals, whether self-referrals or referrals from other agencies and organisations.
Indeed, ARC HSW will provide so-called ‘light touch’ services which will encourage people to socially interact, develop meaningful relationships, engage, or re-engage with nature, learn coping strategies in relation to their mental health and experience improved emotional wellbeing and threshold. These services will commence in April 2024.
OBJECTIVES AND ACTIVITIES (AN OVERVIEW)
The Charitable Objects set out in the governing documents, i.e. the memorandum and articles, are “ to assist in the treatment and care of persons suffering from mental or physical illness of any description or in need of rehabilitation as a result of such illness, by the provision of facilities for work and recreation; and to advance the education of the public in the subject of mental well-being.”
These objects were relevant to the Charity operating as Sea Sanctuary and continue to be relevant to the new services being provided.
We have referred to the guidance from the Charity Commission on public benefit when reviewing and planning our activities and our trustees consider how our planned activities and our direction contribute to the aims and objectives they have set.
POLICY ON RESERVES
With the new activities, a formal reserves policy is not currently appropriate, but the charity will regularly monitor and assess forecasted budget and expenditure to ensure that cash inflows and expenditure over the coming 12 months are sufficient to cover known expenditure together with a contingency for unforeseen expenditure.
REMUNERATION
Prior to closure, financial and non-financial benefits of all employment packages were set by the CEO and the Directors based on mid-point market values. Salaries were subject to an annual review. The structure moving forward is still being considered.
PUBLIC BENEFIT
The trustees confirm that they have complied with the requirements of section 17 of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission for England and Wales.
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ARC Healthcare Southwest
Trustees' Report
OUR ACTIVITIES PRIOR TO CLOSURE
The main activities during the 18-month period to 31st May 2023 were:
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Dutch Barge (Known as the ARC) – OFSTED Registered Children’s Home (to February 2022)
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Dutch Barge (Known as the ARC) – Trauma and Therapy Centre (July 2022 to January 2023)
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Sailing Activities (April 2022 to October 2022)
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One to One Therapy
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G999
-
EAP
These are considered in a bit more detail below.
Dutch Barge (The ARC) – OFSTED Registered Children’s Home
During the year to November 2021, the charity continued to run an OFSTED registered children’s home on our Dutch Barge, known as the ARC. Because of the well-publicised difficulties recruiting suitably qualified care staff in Cornwall, the Trustees took the difficult decision in October 2021 to cease this activity, and the home was closed in February 2022. The home provided a major source of income for the charity and its closure was a contributing factor for the charity’s financial difficulties.
Dutch Barge (The ARC) – Trauma and Therapy Centre
Following the decision to stop using the ARC as a children’s home, the decision was made to repurposed the boat as a Trauma and Therapy Centre, and it was formally launched as such in July 2022 with the assistance of a number of grants to fund the repairs and enhancements required to the boat and the quayside it is moored on.
Although well received for its services, the financial model for its usage relied on the NHS utilising it. Despite numerous visits from them and promises to commit to a significant usage, the delays and lack of commitment from them was the final trigger for the decision to close the Charity. The ARC was then sold late in 2023 at a loss of £308,358.
Sailing Activities .
During the year to November 2021, our sailing activities mainly revolved round Sail Into Life (“SiL”), our award-winning residential sailing and person-centred therapeutic programme, using our yacht, Winter. Achieving outstanding results, our SiL programme has featured on local, national, and global TV, featured in several magazines/publications and is the recipient of several awards.
In early 2022, we were kindly offered the use of a traditional tall ship (Irene), for an initial 5-year period, free of charge. Our yacht Winter was therefore sold, and in April 2022 we took delivery of Irene and launched a much more comprehensive sailing programme. Irene of Bridgewater was over 100 years old and was a 120-foot-long twin masted gaffer. From this we continued to deliver Sail into Life, but also added various half day, day, and week sails, some with therapists on board, and some just using the boat for a sailing experience, executive retreats, or holiday. At all times, we were emphasising the benefits of Blue Health and all those who have sailed with us agreed that the Sail Into Life programme improved confidence and self-esteem and instilled the hope and self-belief that they could tackle and change the psychological or emotional issues that have been holding them back.
With the closure of the charity, this activity ceased at the end of the season in October 2022, and Irene was handed back to the owners.
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ARC Healthcare Southwest
Trustees' Report
One to One Therapy
Previously carried out primarily in our office, our One-to-One therapy sessions began to take place on the ARC or our newly developed wooden cabins (pods) on the quayside. Our team of experienced and qualified therapists use evidence-based, fully accredited talking therapies and counselling techniques to build resilience, gain empowerment and overcome mental obstacles.
G999. Our Golf-999 project was the first of its kind in the country and ran in partnership with Devon & Cornwall Police. Police officers and Sea Sanctuary’s mental health clinicians responded to people in acute crisis (i.e. attempted suicide/deliberate and significant-self injury). On average, the G999 team responded to two incidents each night and case managed until such time as a successful outcome had been achieved. With a shift in the Directive from the Home Office relating to “right care, right person” (RCRP), the role of the Police across the UK has changed. As a result, the Police are no longer the ‘goto’ emergency service for people presenting with mental ill health and those in acute mental health crisis. As such, working alongside the Devon & Cornwall Police is now unlikely for the foreseeable future until such time as a joint service (Police/NHS) is undertaken. This will allow scrutiny of the new RCRP approach.
We are still considering whether a similar project will re-commence under the new activities working alongside the British Transport Police. This private Police force does not follow the new HO Directive due to the unique environmental challenges and risk profile.
EAP
We saw a growth in our Employee Assistance Programme (EAP) business, supporting the mental health/wellbeing of several hundred employees and we supported both statutory and non-statutory organisations, including the Devon & Cornwall police.
GRANTS AND OTHER INCOME
Income from the Sailing and Therapy activities of the charity were always insufficient to cover costs, and therefore grant income was important to meet our costs. During the 18-month period to 31st May 2023 the following grants were received and included in the income for the year.
| FUNDER | RESTRICTIONS | AMOUNT |
|---|---|---|
| £ | ||
| National Lottery | Trauma and Therapy | 280,000 |
| NHS Winter Pressures | Running costs | 35,000 |
| Tudor Trust | ARC and quayside refurbishment | 40,000 |
| Edward Gosling | Purchase of rib | 40,000 |
| Clothworkers | Purchase of rib | 25,000 |
| Wolfson | ARC and quayside refurbishment | 50,000 |
| Other grants | Various | 39,881 |
| TOTAL | 509,881 |
Since the end of the financial period, the National Lottery community Fund confirmed that it would continue to fund certain running costs of the new activities for 2 years, with a total of £207,979. The first payment of £51,995 was received in January 2024.
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ARC Healthcare Southwest
Trustees' Report
STRUCTURE, GOVERNANCE AND MANAGEMENT
Nature of governing document
Arc Healthcare Southwest is a mental health service based in Falmouth, South West England and it was registered as a charity (1117038) in October 2005. Due to a substantial investment from HM Treasury in 2017 it was necessary to fully incorporate the Charity, a new charity number (1172246) was issued at the time.
The Charity is governed by memorandum and articles of association dated 15 March 2017.
The Charity was run on a day-to-day basis by the CEO and founder Joseph Sabien, assisted by his senior management team. Trustees met formally on at least a quarterly basis, but further regular meetings took place between some of the Trustees and the CEO and senior management team to discuss issues as they arose.
Following its closure, the run-down of the Charity was undertaken by the Trustees, assisted by Joseph Sabien. The structure of the Charity in its new guise is still evolving but continues to be over-seen by the Trustees and Joseph Sabien on a consultancy basis.
Recruitment and appointment of trustees
New Trustees are appointed by the existing Trustees based on the needs of the Charity.
Trustees are appointed based on their experience and the skills they have to offer. Where gaps are identified in the board, skill set trustees will be sought to meet those specific needs. Trustees were formally inducted by the CEO and current board.
DESCRIPTION OF RISKS AND UNCERTAINTIES FACED BY THE CHARITY
The risks and uncertainties faced by the charity in 2024 all relate to the setting up of the new activities as outlined above. These are being co-ordinated by the original experienced founder Joseph Sabien.
PRINCIPAL FUNDING SOURCES
For the next two years, the main funding source is the National Lottery Community Fund, as outlined on the Trustees Report.
SEA SANCTUARY SERVICES LIMITED
Following on from the decision to close the charity taken in December 2022, discussions were held with Lloyds Bank, the only creditor of the charity’s subsidiary Sea Sanctuary Services Limited. Following unsuccessful negotiations with Lloyds, the directors of SSSL decided to place the company into liquidation on 15th February 2024.
FINANCIAL REVIEW
Total income for the 18 month period to 31st May 2023 was £925,861, of which grant income was over 50%. With the loss of the income from the children’s care home activities, the income from other activities was insufficient to cover the high fixed costs of running the charity. Payroll costs in themselves were £764,121 in the period, including redundancy pay of £88,964.
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ARC Healthcare Southwest
Trustees' Report
The following table shows how the loss for the period of £713,169 arose.
| £’000 | |
|---|---|
| Income from activities and donations | 420 |
| Grant funding | 506 |
| Total income | 926 |
| Total staff costs | (764) |
| Loss on sale of ARC | (308) |
| Loss on sale of other fixed assets | (91) |
| Other cost of sales | (164) |
| Other overheads | (312) |
| (713) | |
The cash drain from the operating losses, together with the uncertainty over future income levels was the reason the Trustees took the decision to cease all activities and make staff redundant before the charity became insolvent.
Statement of trustees' responsibilities
The trustees (who are also the directors of ARC Healthcare Southwest for the purposes of company law) are responsible for preparing the trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
Company law requires the trustees to prepare financial statements for each financial period. Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including its income and expenditure, of the charitable company for that period. In preparing these financial statements, the trustees are required to:
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select suitable accounting policies and apply them consistently;
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observe the methods and principles in the Charities SORP;
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make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards, comprising FRS 102 have been followed, subject to any material departures disclosed and explained in the financial statements; and
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
The trustees are responsible for keeping proper accounting records that can disclose with reasonable accuracy at any time the financial position of the charitable company 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
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ARC Healthcare Southwest
Trustees' Report
24/04/2024 The annual report was approved by the trustees of the charity on .................... and signed on its behalf by:
......................................... J M Storer Trustee
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ARC Healthcare Southwest
Independent Examiner's Report to the trustees of ARC Healthcare Southwest ('the Company')
I report to the charity trustees on my examination of the accounts of the Company for the year ended 31 May 2023.
Responsibilities and basis of report
As the charity’s trustees of the Company (and also its directors for the purposes of company law) you are responsible for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 (‘the 2006 Act’).
Having satisfied myself that the accounts of the Company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of your charity’s accounts as carried out under section 145 of the Charities Act 2011 (‘the 2011 Act’). In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
Independent examiner’s statement
Since the Company's gross income exceeded £250,000 your examiner must be a member of a body listed in section 145 of the 2011 Act. I confirm that I am qualified to undertake the examination because I am a member of ACCA, which is one of the listed bodies.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe:
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accounting records were not kept in respect of ARC Healthcare Southwest as required by section 386 of the 2006 Act; or
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the accounts do not accord with those records; or
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the accounts do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a ‘true and fair view' which is not a matter considered as part of an independent examination; or
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the accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities [applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)].
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.
...................................... Deborah Warburton FCCA
24/04/2024
Date:.............................
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ARC Healthcare Southwest
Statement of Financial Activities for the Period from 1 December 2021 to 31 May 2023 (Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses)
| Continuing | Discontinued | |||||
|---|---|---|---|---|---|---|
| Unrestricted | Restricted |
operations | operations | Total | ||
| funds | funds | 2023 | 2023 | 2023 | ||
| Note | £ | £ | £ | £ | £ | |
| Income and Endowments from: | ||||||
| Donations and | ||||||
| legacies | 3 | - | 21,294 | 21,294 | 556,133 | 577,427 |
| Charitable activities | 4 | - | - | - | 332,402 | 332,402 |
| Investment income | 5 | - | - | - | 16,174 | 16,174 |
| Total income | - | 21,294 | 21,294 | 904,709 | 926,003 | |
| Expenditure on: | ||||||
| Raising funds | 6 | - | - | - | (21,971) | (21,971) |
| Charitable activities | 7 | - | - | - | (1,617,200) | (1,617,200) |
| Total expenditure | - | - | - | (1,639,171) | (1,639,171) | |
| Net | ||||||
| income/(expenditure) | - | 21,294 | 21,294 | (734,462) | (713,168) | |
| Net movement in funds | - | 21,294 | 21,294 | (734,462) | (713,168) | |
| Transfer of funds | - | - | (734,462) | 734,462 | - |
|
| - | 21,294 |
(713,168) | - | (713,168) |
||
| Reconciliation of funds | ||||||
| Total funds brought | ||||||
| forward | 814,422 | 21,834 | 836,256 | - | 836,256 | |
| Total funds carried | ||||||
| forward | 19 | 814,422 | 43,128 | 123,088 | - | 123,088 |
The notes on pages 15 to 29 form an integral part of these financial statements. Page 10
ARC Healthcare Southwest
Statement of Financial Activities for the Period from 1 December 2021 to 31 May 2023 (Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses)
| Statement of Financial Activities for the Period from 1 December 2021 to 31 May 2023 (Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses) |
Statement of Financial Activities for the Period from 1 December 2021 to 31 May 2023 (Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses) |
|---|---|
| Unrestricted funds Restricted funds Continuing operations 2021 Discontinued operations 2021 Total 2021 |
|
| Note £ £ £ £ £ |
|
| Income and Endowments from: | |
| Donations and | |
| legacies 3 |
106,309 64,939 171,248 - 171,248 |
| Charitable activities 4 |
851,987 - 851,987 - 851,987 |
| Investment income 5 |
24,048 - 24,048 - 24,048 |
| Total income | |
| 982,344 64,939 1,047,283 - 1,047,283 |
|
| Expenditure on: | |
| Raising funds 6 |
(16,775) - (16,775) - (16,775) |
| Charitable activities 7 |
(1,145,176) (65,025) (1,210,201) - (1,210,201) |
| Total expenditure | |
| (1,161,951) (65,025) (1,226,976) - (1,226,976) |
|
| Net expenditure | |
| (179,607) (86) (179,693) - (179,693) |
|
| Net movement in funds | |
| (179,607) (86) (179,693) - (179,693) |
|
| Reconciliation of funds | |
| Total funds brought | |
| forward | 994,029 21,920 1,015,949 - 1,015,949 |
| Total funds carried | |
| forward 19 |
814,422 21,834 836,256 - 836,256 |
The funds breakdown for 2021 is shown in note 19.
The notes on pages 15 to 29 form an integral part of these financial statements. Page 11
ARC Healthcare Southwest
(Registration number: 10671707) Balance Sheet as at 31 May 2023
| 2023 2021 |
|
|---|---|
| Note | £ £ |
| Fixed assets | |
| Tangible assets 12 |
30,000 226,845 |
| Investments 13 |
- 1 |
| 30,000 226,846 |
|
| Current assets | |
| Debtors 14 |
17,237 875,114 |
| Cash at bank and in hand 15 |
149,797 84,870 |
| 167,034 959,984 |
|
| Creditors: Amounts falling due within oneyear 16 |
|
| (73,946) (341,894) |
|
| Net currentassets | |
| 93,088 618,090 |
|
| Total assets less current liabilities | |
| 123,088 844,936 |
|
| Creditors: Amounts falling due after more than oneyear 17 |
|
| - (8,680) |
|
| Netassets | |
| 123,088 836,256 |
|
| Funds of the charity: | |
| Restricted income funds | |
| Restricted funds 19 |
43,128 21,834 |
| Unrestricted income funds | |
| Unrestricted funds | 79,960 814,422 |
| Total funds 19 |
|
| 123,088 836,256 |
For the financial period ending 31 May 2023 the charity was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Directors' responsibilities:
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The members have not required the charity to obtain an audit of its accounts for the period in question in accordance with section 476; and
-
The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.
The notes on pages 15 to 29 form an integral part of these financial statements. Page 12
ARC Healthcare Southwest
(Registration number: 10671707) Balance Sheet as at 31 May 2023
The financial statements on pages 10 to 29 were approved by the trustees, and authorised for issue on 24/04/2024 .................... and signed on their behalf by:
----- Start of picture text -----
.........................................
----- End of picture text -----
......................................... J M Storer Trustee
The notes on pages 15 to 29 form an integral part of these financial statements. Page 13
ARC Healthcare Southwest
Statement of Cash Flows for the Period from 1 December 2021 to 31 May 2023
| 2023 £ 2021 £ (713,168) (179,693) 38,299 23,234 389,935 - (16,174) (24,048) (301,108) (180,507) 857,877 (19,227) (263,708) 94,526 293,061 (105,208) 16,174 24,048 (771,371) (14,985) 539,983 14,453 (215,214) 23,516 - (39,112) (12,920) (12,920) (12,920) (52,032) 64,927 (133,724) 84,870 218,594 149,797 84,870 |
|
|---|---|
| Note | |
| Cash flows from operating activities | |
| Net cash expenditure | |
| Adjustments to cash flows from non-cash items | |
| Depreciation | |
| Loss on disposal of assets | |
| Investment income | |
| Working capital adjustments | |
| Decrease/(increase) in debtors 14 |
|
| (Decrease)/increase in creditors 16 |
|
| Net cash flows from operatingactivities | |
| Cash flows from investing activities | |
| Interest received | |
| Acquisitions of tangible assets | |
| Proceeds from sale of tangible assets | |
| Net cash flows from investingactivities | |
| Cash flows from financing activities | |
| Repayment of other borrowings | |
| Payments to finance lease creditors | |
| Net cash flows from financingactivities | |
| Net increase/(decrease) in cash and cash equivalents | |
| Cash and cash equivalents at 1 December | |
| Cash and cash equivalents at 31 May |
The notes on pages 15 to 29 form an integral part of these financial statements. Page 14
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31
May 2023
1 Charity status
The charity is limited by guarantee, incorporated in England, and consequently does not have share capital. Each of the trustees is liable to contribute an amount not exceeding £10 towards the assets of the charity in the event of liquidation.
The address of its registered office is: Waterside Court Falmouth Road Penryn Cornwall TR10 8AW
2 Accounting policies
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice (applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)) (issued in October 2019) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.
Basis of preparation
ARC Healthcare Southwest meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes.
Going concern
The Trustees have assessed the Statement of Financial Position and likely future cash flows at the date of approving these financial statements. The Trustees have a reasonable expectation that the Charity have adequate resources to continue in operational existence and to meet its financia; obligations as they fall due for at least 12 months from the date of these financial statements. Accordingly, the Trustees are of the opinion that the going concern basis is appropriate.
Income and endowments
All income is recognised once the charity has entitlement to the income, it is probable that the income will be received and the amount of the income receivable can be measured reliably.
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ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
Donations and legacies
Donations are recognised when the charity has been notified in writing of both the amount and settlement date. In the event that a donation is subject to conditions that require a level of performance by the charity before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that these conditions will be fulfilled in the reporting period.
Grants receivable
Grants are recognised when the charity has an entitlement to the funds and any conditions linked to the grants have been met. Where performance conditions are attached to the grant and are yet to be met, the income is recognised as a liability and included on the balance sheet as deferred income to be released when entitlement occurs.
Other income
Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service.
Expenditure
All expenditure is recognised once there is a legal or constructive obligation to that expenditure, it is probable settlement is required and the amount can be measured reliably. All costs are allocated to the applicable expenditure heading that aggregate similar costs to that category. Where costs cannot be directly attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent.
Raising funds
Expenditure on raising funds includes all expenditure incurred by the Group to raise funds for its charitable purposes and includes costs of all fundraising activities, events and non-charitable trading.
Charitable activities
Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.
All expenditure is inclusive of irrecoverable VAT.
Support costs
Support costs include central functions and have been allocated to activity cost categories on a basis consistent with the use of resources, for example, allocating property costs by floor areas, or per capita, staff costs by the time spent and other costs by their usage.
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ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
Governance costs
These include the costs attributable to the charity’s compliance with constitutional and statutory requirements, including audit, strategic management and trustees meetings and reimbursed expenses.
Government grants
Government grants of a revenue nature are credited to the Statement of Financial Activities as the related expenditure is incurred.
Taxation
The charity is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.
Tangible fixed assets
Individual fixed assets costing £500.00 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.
Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed assets less their residual value over their estimated useful lives, on both the straight line basis and reducing balance basis.
Depreciation and amortisation
Depreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimated residual value, over their expected useful economic life as follows:
| Asset class | Depreciation method and rate |
|---|---|
| ARC development | Over 15 years straight line |
| Boats and vessels | Over 15 years straight line |
| Motor vehicles | 25% reducing balance |
| Office equipment | 20% reducing balance |
| Boat equipment | 15% reducing balance |
Impairment of fixed assets
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Page 17
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
Business combinations
Business combinations are accounted for under the purchase method. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the charity. All intra-group transactions, balances, income and expenses are eliminated on consolidation. In accordance with Section 35 of FRS 102, Section 19 of FRS 102 has not been applied in these financial statements in respect of business combinations effected prior to the date of transition.
Fixed asset investments
Fixed asset investments, other than programme related investments, are included at market value at the balance sheet date. Realised gains and losses on investments are calculated as the difference between sales proceeds and their market value at the start of the period, or their subsequent cost, and are charged or credited to the Statement of Financial Activities in the period of disposal.
Unrealised gains and losses represent the movement in market values during the period and are credited or charged to the Statement of Financial Activities based on the market value at the period end.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the charity will not be able to collect all amounts due according to the original terms of the receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the charity does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Page 18
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Statement of Financial Activities over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the charity has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Fund structure
Unrestricted income funds are general funds that are available for use at the trustees discretion in furtherance of the objectives of the charity.
Restricted income funds are those donated for use in a particular area or for specific purposes, the use of which is restricted to that area or purpose.
Financial instruments
Classification
Financial assets and financial liabilities are recognised when the charity becomes a party to the contractual provisions of the instrument.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the charity after deducting all of its liabilities.
Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
there exists a legally enforceable right to set off the recognised amounts and the charity intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the charity transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the charity, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.
Page 19
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
Investments
Investments in non-convertible preference shares and non-puttable ordinary or preference shares (where shares are publicly traded or their fair value is reliably measurable) are measured at fair value through profit or loss. Where fair value cannot be measured reliably, investments are measured at cost less impairment.
Investments in subsidiaries and associates are measured at cost less impairment. For investments in subsidiaries acquired for consideration including the issue of shares qualifying for merger relief, cost is measured by reference to the nominal value of the shares issued plus fair value of other consideration. Any premium is ignored.
Derivative financial instruments
The charity uses derivative financial instruments to reduce exposure to foreign exchange risk and interest rate movements. The charity does not hold or issue derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in statement of financial activities immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in statement of financial activities depends on the nature of the hedge relationship.
Fair value measurement
The best evidence of fair value is a quoted price for an identical asset in an active market. When quoted prices are unavailable, the price of a recent transaction for an identical asset provides evidence of fair value as long as there has not been a significant change in economic circumstances or a significant lapse of time since the transaction took place. If the market is not active and recent transactions of an identical asset on their own are not a good estimate of fair value, the fair value is estimated by using a valuation technique.
3 Income from donations and legacies
| 3 Income from donations and legacies |
|
|---|---|
| Unrestricted | |
| funds Restricted Total |
|
| General funds funds |
|
| £ £ £ |
|
| Donations and legacies; | |
| Donations from individuals | 37,546 30,000 67,546 |
| Grant income | |
| Grants from other organisations | - 509,881 509,881 |
| Total forperiod ended 31 May 2023 | |
| 37,546 539,881 577,427 |
|
| Total for period ended 30 November 2021 | |
| 106,309 64,939 171,248 |
Page 20
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
4 Income from charitable activities
| 4 Income from charitable activities |
|||
|---|---|---|---|
| Unrestricted | |||
| funds | Total | Total | |
| Other | 2023 | 2021 | |
| £ | £ | £ | |
| Care services and other activities | 332,402 | 332,402 | 851,987 |
5 Investment income
| Unrestricted | ||
|---|---|---|
| funds | Total | |
| General | funds | |
| £ | £ | |
| Other investment income | 16,174 | 16,174 |
| Total forperiod ended 31 May 2023 | 16,174 | 16,174 |
| Total forperiod ended 30 November 2021 | 24,048 | 24,048 |
6 Expenditure on raising funds
Other costs of generating donations and legacies
| Unrestricted | ||
|---|---|---|
| funds | Total | |
| General | funds | |
| £ | £ | |
| Fundraisingcosts | 21,971 | 21,971 |
| Total forperiod ended 31 May 2023 | 21,971 | 21,971 |
| Total forperiod ended 30 November 2021 | 16,775 | 16,775 |
Page 21
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
7 Expenditure on charitable activities
| 7 Expenditure on charitable activities |
|
|---|---|
| Unrestricted | |
| funds Restricted Total |
|
| General funds funds |
|
| Note | £ £ £ |
| Other direct costs | 193,830 2,160 195,990 |
| Staff costs 10 |
413,916 351,128 765,044 |
| Allocated support costs 8 |
482,167 165,299 647,466 |
| Governance costs 8 |
8,700 - 8,700 |
| Total for period ended 31 May | |
| 2023 | 1,098,613 518,587 1,617,200 |
| Total for period ended 30 | |
| November 2021 | 1,145,176 65,025 1,210,201 |
Page 22
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
8 Analysis of governance and support costs
Support costs allocated to charitable activities
| Support costs allocated to charitable activities | |
|---|---|
| Other support Total |
|
| costs 2023 |
|
| £ £ |
|
| Staff training | 2,646 2,646 |
| Other staff costs | 7,541 7,541 |
| Rent | 20,760 20,760 |
| Light, heat and power | 5,071 5,071 |
| Insurance | 26,447 26,447 |
| IT software and consumables | 18,765 18,765 |
| Legal and professional fees | 9,280 9,280 |
| Other office expenses | 3,152 3,152 |
| Telephone and internet | 9,794 9,794 |
| Equipment hire | 3,857 3,857 |
| Repairs and maintenance | 1,720 1,720 |
| Subscriptions and donations | 27,040 27,040 |
| Advertising and marketing | 50,162 50,162 |
| Accountancy and bookkeeping | 14,393 14,393 |
| Printing, postage and stationery | 7,917 7,917 |
| Motor and travel expenses | 25,675 25,675 |
| Interest payable | 6,378 6,378 |
| Loss on disposal of tangible assets | 397,788 397,788 |
| Sundry expenses | 5,628 5,628 |
| Bad debts | 2,173 2,173 |
| Entertaining | 1,279 1,279 |
| 647,466 647,466 |
Governance costs
| Governance costs | ||||||
|---|---|---|---|---|---|---|
| Unrestricted | ||||||
| funds | Total | Total | ||||
| General | 2023 | 2021 | ||||
| £ | £ | £ | ||||
| Audit fees | - | - | 8,400 | |||
| Audit of the financial statements | ||||||
| Independent examiner fees | ||||||
| Examination of the financial | ||||||
| statements | 3,540 | 3,540 | - | |||
| 3,540 | 3,540 | 8,400 | ||||
Page 23
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
9 Trustees remuneration and expenses
No trustees, nor any persons connected with them, have received any remuneration from the charity during the year.
No trustees have received any reimbursed expenses or any other benefits from the charity during the year.
10 Staff costs
The aggregate payroll costs were as follows:
| 10 Staff costs The aggregate payroll costs were as follows: |
|
|---|---|
| 2023 2021 |
|
| £ £ |
|
| Staff costs during the period were: | |
| Wages and salaries | 695,403 627,207 |
| Social security costs | 58,669 52,642 |
| Pension costs | 10,972 12,575 |
| 765,044 692,424 |
During January 2023 the Charity ceased to trade and as a result the following redundancy and notice period payments were made to employees;
period payments were made to employees; |
|
|---|---|
| Redundancy pay | £40,074 |
| Notice Pay | £92,084 |
The number of employees whose emoluments fell within the following bands was:
| 2023 2021 |
|
|---|---|
| No No |
|
| £60,001 - £70,000 | - 1 |
| £140,001 - £150,000 | 1 - |
Page 24
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
11 Taxation
The charity is a registered charity and is therefore exempt from taxation.
12 Tangible fixed assets
| 12 Tangible fixed assets |
12 Tangible fixed assets |
|---|---|
| Land and buildings Furniture and equipment Motor vehicles Other tangible fixed asset Total |
|
£ £ £ £ £ |
|
| Cost | |
| At 1 December | |
| 2021 100,024 159,632 26,149 - 285,805 |
|
| Additions 4,099 5,790 - 761,482 771,371 |
|
| Disposals (104,123) (165,422) (26,149) (731,482) (1,027,176) |
|
| At 31 May2023 - - - 30,000 30,000 |
|
| Depreciation | |
| At 1 December | |
| 2021 20,003 26,983 11,974 - 58,960 |
|
| Charge for the | |
| year 6,982 6,045 2,600 22,672 38,299 |
|
| Eliminated on | |
| disposals (26,985) (33,028) (14,574) (22,672) (97,259) |
|
| At 31 May2023 - - - - - |
|
| Net book value | |
| At 31 May2023 - - - 30,000 30,000 |
|
| At 30 November | |
| 2021 80,021 132,649 14,175 - 226,845 |
|
| 13 Fixed asset investments |
|
| 2023 2021 |
|
| £ £ |
|
| Shares in group undertakings and participating interests | - 1 |
The subsidiary Sea Sanctuary Services Limited was entered in to liquidation on 8 March 2024 and is in the process of being wound up.
Page 25
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
14 Debtors
| 14 Debtors |
|
|---|---|
| 2023 2021 |
|
| £ £ |
|
| Trade debtors | 13,590 14,104 |
| Due from group undertakings | - 801,755 |
| Prepayments | - 56,154 |
| Other debtors | 3,647 3,101 |
| 17,237 875,114 |
|
| 15 Cash and cash equivalents |
|
| 2023 2021 |
|
| £ £ |
|
| Cash on hand | - 1,468 |
| Cash at bank | 149,797 83,402 |
| 149,797 84,870 |
|
| 16 Creditors: amounts falling due within one year |
|
| 2023 2021 |
|
| £ £ |
|
| Trade creditors | 9,510 17,379 |
| Hire purchase and finance leases | - 4,240 |
| Due to group undertakings | 30,123 189,594 |
| Other taxation and social security | 19,202 20,594 |
| Other creditors | - 101,294 |
| Accruals | 15,111 8,793 |
| 73,946 341,894 |
|
| 17 Creditors: amounts falling due after one year |
|
| 2023 2021 |
|
| £ £ |
|
| Hire purchase and finance leases | - 8,680 |
Page 26
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
18 Obligations under leases and hire purchase contracts
The total value of future minimum lease payments was as follows:
| 2023 2021 |
|
|---|---|
| £ £ |
|
| Within oneyear | - 189,594 |
| 19 Funds |
|
| Balance at 1 Incoming Resources Balance at 31 |
|
| December 2021 resources expended May 2023 |
|
| £ £ £ £ |
|
| Unrestricted funds | |
| General | |
| Unrestricted Funds | 814,422 386,122 (1,120,585) 79,959 |
| Restricted funds | |
| Invictus G999 | 21,834 - (21,834) - |
| Just Giving 999 | - 294 (294) - |
| Arnold Clark G999 | - 1,500 (1,500) - |
| Norman Family Trust | - 7,500 (7,500) - |
| NHS Winter Pressures | - 35,000 (35,000) - |
| National Lottery | - 280,000 (280,000) - |
| Duke of Cornwall Benevolent | |
| Fund | - 5,000 (5,000) - |
| Greenhook Fishing | - 45,288 (2,160) 43,128 |
| Tudor Trust | - 40,000 (40,000) - |
| Albert Hunt | - 4,000 (4,000) - |
| Edward Gosling | - 40,000 (40,000) - |
| Clothworkers | - 25,000 (25,000) - |
| Wolfson | - 50,000 (50,000) - |
| Cornwall Council | - 5,999 (5,999) - |
| Penryn Town Council | - 300 (300) - |
| Total restricted funds | |
| 21,834 539,881 (518,587) 43,128 |
|
| Total funds | |
| 836,256 926,003 (1,639,172) 123,087 |
Page 27
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
| Balance at 1 | Incoming | Resources | Balance at 30 | ||
|---|---|---|---|---|---|
| December 2020 | resources |
expended | November 2021 | ||
| £ | £ | £ | £ | ||
| Unrestricted funds | |||||
| General | |||||
| Unrestricted Funds | 994,029 | 982,344 | (1,161,951) | 814,422 | |
| Restricted | |||||
| Invictus G999 | 21,920 | 64,939 | (65,025) | 21,834 | |
| Total funds | 1,015,949 | 1,047,283 | (1,226,976) | 836,256 |
20 Analysis of net assets between funds
| 20 Analysis of net assets between funds |
|
|---|---|
| Total funds at | |
| 31 May | |
| 2023 | |
| £ | |
| Tangible fixed assets | 30,000 |
| Current assets | 167,034 |
| Current liabilities | (73,946) |
| Total net assets | 123,088 |
| Total funds at | |
| 30 November | |
| 2021 | |
| £ | |
| Tangible fixed assets | 226,845 |
| Fixed asset investments | 1 |
| Current assets | 959,984 |
| Current liabilities | (341,894) |
| Creditors over 1year | (8,680) |
| Total net assets | 836,256 |
21 Related party transactions
When Sea Sanctuary closed its doors in January 2023, the Trustees were under the impression that the Charity would cease a donation of £23,656 was made to ARC Healthcare CIC on 5 May 2023. ARC Healthcare CIC was set up by Joseph Sabien after Sea Sanctuary closed to keep supporting people who were in desperate need of mental health support.
Page 28
ARC Healthcare Southwest
Notes to the Financial Statements for the Period from 1 December 2021 to 31 May 2023
The payment was split as follows.
| The payment was split as follows. | |
|---|---|
| £ | |
| Website development costs | 8,460 |
| Legal fees | 1,359 |
| IT equipment costs and one year’s support | 5,337 |
| Marketing expenditure | 1,600 |
| Containers refurbishment | 2,700 |
| Salary costs | 4,200 |
| TOTAL DONATION | 23,656 |
All of the donation money has been spent by ARC Healthcare CIC and the computer assets currently held will be transferred across to the charity.
Page 29
ARC Healthcare Southwest
Statement of Financial Activities by fund for the Period from 1 December 2021 to 31 May 2023
Unrestricted Funds
| Unrestricted Funds | |
|---|---|
| Total Total |
|
| Unrestricted Unrestricted |
|
| Funds Funds |
|
| 2023 2021 |
|
| £ £ |
|
| Income and Endowments from: | |
| Donations and legacies | 37,546 106,309 |
| Charitable activities | 332,402 851,987 |
| Investment income | 16,174 24,048 |
| Total income | |
| 386,122 982,344 |
|
| Expenditure on: | |
| Raising funds | (21,971) (16,775) |
| Charitable activities | (1,098,613) (1,145,176) |
| Total expenditure | |
| (1,120,584) (1,161,951) |
|
| Net expenditure | |
| (734,462) (179,607) |
|
| Net movement in funds | |
| (734,462) (179,607) |
|
| Reconciliation of funds | |
| Total funds brought forward | |
| 814,422 994,029 |
|
| Total funds carried forward | |
| 79,960 814,422 |
This page does not form part of the statutory financial statements. Page 30
ARC Healthcare Southwest
Statement of Financial Activities by fund for the Period from 1 December 2021 to 31 May 2023
Restricted Funds
| Restricted Funds | |
|---|---|
| Total Total |
|
| Restricted Restricted |
|
| Funds Funds |
|
| 2023 2021 |
|
| £ £ |
|
| Income and Endowments from: | |
| Donations and legacies | 539,881 64,939 |
| Total income | |
| 539,881 64,939 |
|
| Expenditure on: | |
| Charitable activities | (518,587) (65,025) |
| Total expenditure | |
| (518,587) (65,025) |
|
| Net income/(expenditure) | |
| 21,294 (86) |
|
| Net movement in funds | |
| 21,294 (86) |
|
| Reconciliation of funds | |
| Total funds brought forward | |
| 21,834 21,920 |
|
| Total funds carried forward | |
| 43,128 21,834 |
This page does not form part of the statutory financial statements. Page 31