Registered numbgr.. 11217433 Charity number.. 01177527 HARBORNE AND SMETHWICK CHARITABLE TRUST (A company limited by guarantee) TRUSTEES, REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) CONTENTS Page Reference and admlnSgtratlve detslls of the Charlty. Its Trustees and advlsers Trustees. report Trustees. responslblll¢les ststement Indop8ndent auditorfs report on the financial ststements Consolldated ststement of financial activities 3-29 31-34 35 Consolidated balance sheet 36-37 onsolidated ststement of cash flows 38 Nt)tes to the financlal statements 39-58 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY. ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 30 JUNE 2023 The Trustees and Directors of the Harbome and Smethwick Charitable Trust al the date this report was approved are: Trustges CllrA Boslan Iresigned 5 October 20231 Mrs 8 Chetiyawardana Mr G Hewrtt BA IHons} Mr D Jeffery. Chaimian Mrs P Leadbeler Mrs R Silber Mr V Silvesler MBE Mr G Taylor (appointed 23 November 2023 Mr N Thompson MrFWa Cllr R Mufiihi lappoinled 10 January 2024) Company rggistsred number 11217433 Charity regist8rgd number 01177527 Registered offlce Hollingworth House 109 Court Oak Road Harbome Bimiingham B17 9AA Chaiman Mr D Jeffery Ext•mal audltor Crowe U.K. LLP Black Country House Rounds Green Road Oldbury West Midlands B69 2DG Bankers National Westmlnster Bank PIC 2 St Philip's PlaGe Bimiingham B3 2RB Page 1 HARBORNE AND SMETHWICK CHARITABLE TRUST {A company limited by guarantsel REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY. ITS TRUSTEES AND ADVISERS {CONTINUED} FOR THE YEAR ENDED 30 JUNE 2023 Solicitors Anthony Colllns 134 Edmund Street Bimingham B3 2ES Tyndallwoods 29 Woodbourne Road Edgbaslon 817 8BY Higgs and Sons 3 Waterfront Business Park Briedey Hill Wesl Midlands DY5 1LX Surlveyors Commerci81 Portfolio.. Cottons Chartered Sur41eyors Cavendish House 3591361 Hagley Road Edgbaslon 8178DL Residential Portfolio.. Robert Powell Chartered SuNeyors 7 Church Road Edgbaslon Birmingham B15 3SH Investm9nt advisors Evelyn Partnerg 14th Floor 103 Colmore R¢)w Bimiingh8m BN3 3AG Internal audltorn Valld8ra Unil 3 Crompton Court Attsvood Road BuintwcÉKI Staffordshire WS7 3GG Page 2 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company Ilmlted by guarantee) TRUSTEES, REPORT FOR THE YEAR ENDED 30 JUNE 2023 1. Foreword by David Jeffery Chair of the Board of Trustees As I write this report in late November 2023, 1 reflect on 202213 as a period of immense polrf(ical chao$ plus the legacy problems of the pandemic in the UK affecting the Charity, not to mention in the world. The Charty has $urvwed, and our investments have increased in the light of the recent re-valuation of the property portfolio and only a 1.90A reduction in the value of the investment portfolio. In the light of what has been the financial turmoil and cost of living crisis we were fortunate in being able lo continue with a full round of grant making and looking after our Amshouse residents. All of this is dealt wf(h in detail later in the Reports from Chaits of the 4 commiitees- Finan￿, Charitable Activities, Propety and Almshouse. The Report's format has changed from previous years. The Board and CEO agreed that from this year there should be r8POrts compiled by the individual commitiee's Chair rather than an overall report from the CEO. There is therefore no rep)rt from the CEO but instead a fully detaiW account of the relevant matters. I feel that I should commence my report wf(h some wmmenl about the role of the CEO. Steven Simpson. His leadership, knowledge of the Charity sector, contacts and ability to foresee problems are a huge asset. He & I meet at least once a week and I receive a full update about issues arising wrth residents. staff and the general business of the Charty. l am constantly amazed at the incompetence, arrogance and generalty unhelpful attitudes displayed by the various agencies and organisalions that he and the staff musl deal with. An inordinae amount of his and the staffs lime is spent in dealing with issues that various agencies or commercial organisations Create through general incompetence and unhelpful attitudes. One of the main causes of this problem is one that pervade$ many asp$cts of modem lrfe - an inability lo find anyona who is prepared to deal th an issue wilhoul buck passing. Who woukl have believed the ￿ngth8 we had to go lo simply trj transfer £250,000 from our accoLfjnl al the Nalwesl to the COIF investment fund- apparently, we needed lo send a fox- we haven't a machine anymore- nor had the bank- in the event we were forced to deal with the transfer in a s&ries of single smaller transactions raher than being able to transfer the lol al once!1 Steven's role requires a strategic approach and the constant call$ on his lime generated by comparatively minor, bul urgent prOb￿M$ has led the board lo approve a reslructure of the staff and to divide the administrative staff into teams Operations - Carolyn Amold has been appointed lo head this team and Central servI￿s - head will be recruited to this team shortly. The discussbjns that gave rise lo this change occurred during 22123. Notable issues during this year dealt with in greater detail later In￿rporatIon ~ despite the process appearing to be a simple one when we first embarked upon r( neaAy 10 years ago, wg have still not dotted all of the i's and crossed all of the t's. The current si(uation is set out in the Finance Committee report, and we are now twstees and directors of The Harborne & SMethW￿k Charitable Trust Lld., which company acts as the sole trustee of the Hartx)rne Parish Lands Charity. We were able to help our residents through the energy crisis by giving each of them a £50 grant every month from November 2022 to March 2023. This was much appreciated by them. Making grants to individuals has caused us concern over the last few years and has been refiected in the Charitable Activilies Commillee's repgrt. Money from the individual grant budget this year remained un5penl and was transferred lo the organisalional grant budget. We know that there is need in our communty area but find il increasingly difficult lo get our message across a$ more and more organisations that previously referred people to us no longer exist. The year saw our 2 newty appginled property management companies take over and we were pleased that our propety portfolio is now being properly managed. Page 3 HAR8ORNE AND SMETHWICK CHARITABLE TRUST IA company limitsd by guarantsel TRUSTEES, REPORT (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 2 residential propertie5 that had been regulated tenancies became vacant in the last 18 months were gradually improved during the year and are either complete or about lo be so. They will n¢)w be bt at a market rent considerably increasing the rental income. Af(hough our investment portfolio, inevitabty, given the turmoil of the period, saw a small drop in valLbe we have been able to place some funds on deposrt - evenluallyl and take advantage of the rise in interest rates. Our Almshouse stock has been improved as we have been able lo recommence the vaTiOUS upgrades that had been delayed by the consequences of the pandemic. Occupancy rates have been h￿h wrth a swift turnaround of voKls. Resident surveys have shown high levels of satisfaction that refflect what I would expect and hope for- our residents are wo11 housgd and supported. 8irmingham's attempts to deal wffh rogue landlords in the late Summer and Autumn of 2022 pelered out without causing us a lot of extra work - we weren't expecting to be treated as 'ro9ue" but were concemed about additional bureaucracy arising from the checks that were likely to lake place. We lost one trustee who has resigned during the reporting period but had, in fact, not been seen for some lime. Generally. InJslee attendance al Board Meetings and the regular subgramme. no personal benefft is mre than ineidenlal. The obvious 8xc8ption is the chartys indNidual grant programme of £41,864 which provided relief to people in povety and crisis in the anaenl parish of Harbome and the £25,000 spend on the winter hardship grant programme. Decisions made by the Trustees regarding the individual grant programme are still eonsislenl with the charity's purpose bul onty satisfy the 'benefrt' aspect of the Publ￿ benefft requirement a$ detailed in Charity Commission guidants. Page 15 HARBORNE AND SMETHWICK CHARITABLE TRUST IA Company limlted by guarantee) TRUSTEES, REPORT ICONTINUED} FOR THE YEAR ENDED 30 JUNE 2023 Objectives and activities (contlnuedl 2.0 Achievements. Perfom)an¢e and Plans for the F￿Ure 2.1 A Report from the Almhouses Committfje Achievements and Perfomi The Almshouse Committee continue to provide gocd quality accommodation to 118 beneficiaries in the fwe schemes that we have.. Harbome House, Harbome Dore House, Harborne Firs Close, Smelhwiek Harbome Cottages, Smethwick Larksfield, Smethwick In the last yeai we have let 14 flats to new applicants and still have 34 people on the wailing list. The average length of time from the application being approved lo an offer being made is 156 days or 22 weeks Ilhe same as last yearl. From the lime a void becomes available we endeavour to have il let within 21 working days, the re-let lime is al present is 19.8 days. Current aThears are O.OOh on annual charges against a largel figure of 2.50A. Void losses and bad debts is 1.53ts against a largel of less than 4%10.49°k last year...this is likely because 3 of the votds were filled with internal transfers which gives us double the void weeks for eaeh new resident coming in}- During the ksl financial year, the charity ha5 spent £156,208 improving the almshouses. Firs Close- Replacing cladding and making the lift Shaft water twdhl Dore House- Cleaning and minor repairs to the drains Replaced sheds Harborne HoLtse- Cleaning and minor repairs to the drains Installing new securrty gales Replacing the floor in the tsvo laundry rwms .Fitted new carpet in the main lounge Page 16 HARBORNE AND SMETHWICK CHARITABLE TRUST (A company Ilmited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 2.0 Achievements, Perfomiance and Plans for the Future {contlnuedl Plans for the fu The Almshouse Committee continue to make improvements lo the various schemes in Harbome and sm8thw.ck and have the following plans for the future-. Recruit Activty Coordinator and Housing Officer. Harborne House- Resurfaee car park (delayed in 2022123} Refurbish 4 shower rooms Converting the communal bathroom into a mullrfunclion spa Harbome Cottages- Replacing hips, ridges and eves on the roof Convertin9 some of the gardens into ? Wild Flower Garden External decorating Firs C105e- Replacing hips and ridges on the roof Replacing the windows Assessing options ft)r replacing the plarform lift Repl￿1n9 the flcL)r in the laundry room Dore House- Upgrading the CCTV cameras Repairs and renewal of stone work Vlctor Sllvester MBE Chair of Almshouse Committee Page 17 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company Ilmlted by guarantsg) TRUSTEES, REPORT {CONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 2.0 Achlevements, Perfomiance and Plans for t￿ Futur• Icontlnued) 2.2 A RoPQrt from the Charitable Actlvlty Commlttoe Achievements and Perf0m￿nCe In 2022123 the charity committed £300,676 to 4,538 beneficiaries. Grants totslling £230,652 were made to organisations splf( across the following gTrnt priorf(ies' £83,225 was spent on 7 grants supporting seNices for okler people £58,161 was spent of 5 grants SLtpporting debt and money management servi¢es £60,186 was spent on 4 grants supporting foc#J and household goods distribution servitss £29,080 was spent on 3 grants supporting provision for 16-24 year old NEET INot in Education, EmployTnent or TrainiThJ} provision or provision for those at risk of becoming NEET £41,864 was Spent on the Chari￿s individual grant programme.. £16,803 supported 83 beneficiaries with 27 grants in Bimiingham.. and £28.222 supported 122 beneficiaries with 42 grants in Smelhwick. 8ecause of the exception impact of the cost of living crisis on the Charitys almshouses residents the trustee designed 8 winter hardship grant for the residents of the charity's almshouses. This grant comprised of 5 payments of £50 each month be￿n November 2022 and March 2023. £25,000 was spent on the winter hardship grant programme.. £9,600 supported 38 individuals wth 36 grants in Bimiingham £15,400 supported 65 individuals wth 59 grants in Smethwick The four largèst grants made by the charity in 2022123 accountgd for £90.064 {32%} of the charity's grant spend and 952121 OAI of the beneficiaries reached. These grants are detailed belt)W'. Focus Blrmlngham Focus Bimiingham requested the grant lo continue the work of the Communrty Worker who covers the HPLC area. This worker ￿rrIeS out home assessments within 72 hours of a referral lo establish what help can be offered, such as beneffts assistance or enrolment onlo an eye contact infomialion course. The Community Worker also wns weekly social groups in Harborne for the visually impaired land those wf(h dual sensory kJSS. where hearing is an issue tool, who attend coffee mornings and enjoy a variety of activities such as singing. quizzes, gentle exereise, as well as the opportunty for people with similar conditions to sttialise together. Women ActEng In Today's Society (WAITS) WAITS used the grant lo deliver a financial health programme for women who are living at their refuge in the Ancient Parish of Harbome They also delivered a financial health programme for women who are survivors of or al risk of domestic abuse. They report that the primary reason the women they work with slay in abusive relationships, is Ihal they rely on their partners for financial support. Controlling money in a relationship is a form of abuse and these women often feel liapped in a relationship as they fear leaving wll make them homeles5 and destf(ute with no means of supporting their children. They also report the pandemic has made the situation even harder as COVID-19 lockdowns led lo an alamiing increase in domeslK abuse. Page 18 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limitod by guarantso) TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 30JUNE 2023 2.0 Achi•v8rnents. Performance and Plans for the Futuro {continuedl Aslan Family Counsolllng Servlc8 {AFCSI AFCS applied for a conllibution towards the costs of providing family, couple and individual counselling in Ihg HPLC catchment area. AFCS employ Asian counsellors who understand the cultural and religious beliefs of service users, speak a number of community languages, and sharo a common ground. AFCS slal& that the most common reason for counselling is anx￿tyIdepres8IonIpanlC attacks often linked lo the stress of poorly managed finances, ullimalely having a negative impad on their service users, relationships. Their usual refeirals are made through GP surgeries, CAMHS and hea￿h care agencies. They also directly outreach lo local libraries. ommunty Centres and farth-based support netr￿Tk8. Smèthwick Church Action Network Ismethwick CANI Smelhwek CAN requeste(l a grant to help support the costs of a part4ime Food Action Worker and Food Action Co-ordinolor. These Iwo part-lime staff worked towards tsckling Ihg issues Surrounding food poverty and the impact this has on peoples, lives (such a5 k)w selfryesleem, social isolation} rather than just distributing food packs. They further developed foodbank logistics, fundraising and partnerships, and the Smelhwid( CAN Foodstore la self-esleem slep away from the foodbank), where service users coming out of absolute povety are invited lo pay a nominal cost for the food they lake, and shop for their specific food needs, as opposed to simply taking a food parcel. Food Action Worker also managed the Smethwick CAN Grow community allolmenl scheme. encouraging service users lo grow their own food. boosting health, well-being and K￿la1 inclusion in the process. In 2023124 the charty plans to.. Spend £215,000 on grants to organisations Spend £55,000 on grants lo indwhlua15 Increase the wmmunity involvement in the preparation of the grant strategy Develop a robust process to address the issue of irscrea8ing numbers of self-referrals Rachel Silber Chair of the Charitable Activity Committee Page 19 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limlted by guarantee) TRUSTEES, REPORT ICONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 2.0 Achlevemgnts, Performance and Plans for the Future (continued) 2.3 A Report fiom the Property Commlttee Achievem nts and Perfomiance 2022123 has been a busy year for the property commrttee. The earlier part of the year was dominated with embedding the change in managing agents and reconciling the outgoing agents closing data with the position the new agents inherited. This was a dfficum time and revealed a number of unaddressed maintenance issues wrthin the charty's residential estate that our residential agents have wolked lo mrred. 11 is pleasing lo see that property maintenance costs have now redueed Significantly indicating our eslale has been brought back into lop condf(ion. Alongside the change in managing agents the chanty also requested a review of live leases by the charty's new commercial agent. This review identified a number of historic issues that our agent has investigated, anatysed and proposed strategies lo resolve. Where necessary the tru$lees sought and received outside legal advice. The charity's property investment$ generated £543,443 of income., an increase of 2.70A on the previous yea¢$ figure of £529,058. Unfortunately, costs have also increased signrficantly lo £331,852., an increase of £126,996 over last year. This increase in cost was planned and budgeted and is due lo the complete refurt)ishmenl of the two of the charty's residential properties. one which was completed in year while the olhgr nears completion as we write this report. When refurbished the rental income generated by these properties will increase signrfieanlly with the property completed so far increasing from £525 per month lo £1,550 per month. The charty has revalued its inveslmenl properties in 2022123 and is pthsed lo report that the portfolio has inereased in value from £10,182,500 al 30th June 2019 10 £11,618,000 at 30th June 2023. An increase of £1,195,500 and even allowing for properties purchased betsveen the valuation the charity has still eXperien￿d an In¢￿aSe of 16.7Vh in the portfolk) overall. Average yields are 3.50h for residential properties and 6.1Y• for commercial properties. Future Plans In 2023124 the charity intends lo pu￿hOse t)ne or two additiorsal residential properties in the Harbome area for c. £300,000- £350.000 each. The charty also plans to finish the refurt)ishmenl of the one remaining propety currently void in the charity's investment property portfolio. After the refurbishment we expect the monthly rental figure lo achieve or exceed the £1,550 Comparable properties wffhin the estate have achieved. The trustees anticipate that as lime passes other long-lemi tenancies within the charitys estate may end. Where this happens, the charity will initiate the same assessment and refurbishment process on these properties lo ensure the eslale is kept in go¢xi order and maximum rental perfomiance is aehieved. The Charity will resolve the last remaining historic lease issues and the charity wtll ensure that all documentation is back under its direct control eiiher in the charity's solicitors Tyndal￿od'S secure document storage or where not of such high value or'live, historic files will be moved to other secure long-teryn storage ¥olLrtions. The Charity will also invest in ils Hollingworth House headquarters upgrading the electrical system and installing LED lighting throughout. Nlgel Thompson Chair of the Property Committee Page 20 HARBORNE AND SMETHWICK CHARITABLE TRUST A company limited by guaranteè) TRUSTEES. REPORT {CONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 2.0 Achlevements, Pgrfornianc8 and Plans for Ihe Future Icontinuodl 2.4 A Report from the Flnance and Audlt Committee Achievements and Perfomiance 2022123 has been a busy year for the finance and 8udf( committee a$ it helps to steer the charity through still challenging economic times. The committee has reviewed the statement of investment principles and amended them to better reflect the new risk framework adopted by the Charity's investmnt management agent Evetyn Partners. In February the committee rewewed the WMC rates paid by almshouses residents and the proposed increase prepared by the charity management team. The committee instigated a policy that capped all resident's utility charge increase to a maximum of £8.00 per week and also voluntarily ￿PPed Management and Maintenance charge increases al the govemmenl imposed limit for social housing las an almshouse the chanty was exempl but felt increasing beyond that level could adversely affeet the charitls residents) The committee has received an internal audit report from thè charity's intemal audit fimi Validera which examined investment management at the charity. The report gave the Charity an adequate assurance rating and recommènded feceiving a narrative report in addition to the quantilaliv8 data from the property managers as well as minor changes lo the reporting schedules Ivacanl propety lists etc.). The committee will work wi(h the Property Committee and the charl￿S managerr*nt team to implement the finding ofthe report in the future. The committee has also considefed the treatment of the charty's cash rese￿8$ noting that while until recenlty managing short temi cash investment accounts would likely cost more than il would yield, increasing interest r*es have made short lemi cash investments more attractNe. As a result, the committee has overseen the move of £250,000 into the charty's COIF investment account and the wi(hdrawal of £150,000 from the ¢harity's cash reserve that was used lo purchase a mixture of different types of bonds., an area in which the charity's investment portfolio has Iradilionally been underweight. The committee has scrutinised the activities of the charitls investment managers induding receiving 4 written quarterly reports and meeting with the investment managers ￿l¢e in February and September to discuss pertormance and strategy. On 30th Jung 2023 the chanty's investment portfolio was worth £5,168.656 a reduction of £102,079 from ts June 2022 value of £5,270,735. Page 21 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limitod by guarante&) TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 2.0 Achlevements. Perfomiancè and Plans for the Future Icontlnuodl As al 30th June the portfolio was invested as follow5.. UK Equities Overseas E 26.9% 45.1% 14.9% 7.4% 3.1% 7.7% 2.1% 9.9% 11.7% 0.0% uilies North America Europe (Excluding the U.K.} Japan Pacrfic Basin (Excluding Japan) Emerging Markets Global Bonds UK Government UK Index Linked UK Corporate Overseas 2.0% 8.4% 9.7% 6.1% 0.5% Altemalive Assets UK Propetty Cash In 2022123 the kx)rtfolio generalgd £159,140 a weld of 3.1 %. Performance against benchmark has been disappointing with annualised perfomian¢e failing to match benchmark al intervals of 3 rnonths l-0.5QA against a benchmark of 0.10A}, 6 monlhs11.20k against a benchmark of 3.1 OA), 1 year11.6Dh a9ain$l a benchmark of 4.0%) and 3 years14.0 against a benchmark of 4.7DA} although the charty notes that performance is much improved when considering S year tiMesca￿S 14.0% against a benchmark of 3.5Vol and since the portfolio's inception {8.IOA against a benchmark figure of 7.80AI. This underperformance against benchmarks has been driven mostly by the larger than average amount of property and infr8s1ruclure holdings in the charty's portfolio. Nearfy 10°h of the ¢harills portfolio is held in property and infrastructure funds and al present many of these are trading at a substantial discount of beknn 13 and 300/0. In part these discounts are being driven by increased competition from bonds which have recently stsrted to off8r investors and even lower risk allern*ive lo property funds for those wf(h income demands bul a lower appetr(e for risk than equf(ies present. The trustees still belEve that holding these funds is the right long- lemi strategy noting that there are not any structural issues wf(h these funds Irenls are rising faster than anticipated and commercial void rates are stawng low} and the trustees ant￿Ipate better long term relums from pr￿ertY funds as well as high levels of income when compared to bonds. The Trustees have appointed Evetyn Partners lo manage the charity's investment portfolio and have set the fim the ft)Ilowing objectives.. The creation of a sufficient financial relum to enable the Charity lo carry out 118 purposes effectively and thout intemjption The maintenance and enhan￿ment of the investment funds over the long term To obtain a reasonable balants betsveen capital growth and income so that the CharTty can meet future as well as eurrent To maintain a medium risk profil& The Trustees, policy is lo invest in an appropriate mix of real assets i.e. equities, fixed interest securities. allernalive assets and monetary assets. Trustees recognise that the returns on equit￿$, while expected lo be greater over the longer lem than those of r￿ed interest and monetary assets, are likely to be more volatile. Page 22 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company Ilmlted by guarantee) TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 2.0 Achièvèments. Perfomiance and Plans for tho F￿Ure (continued} Investment in a mix of asset classes should nevertheless provide the levels of retum required for the Trust lo achieve its objectwes, whilst mitigating volatility. Future Plans In 2023124 the committee is looking forward lo receiving internal audit reports on infomiation governance and the ICT structure of the charity. These reports will be extremely timely and will allow extemal scrutiny of the charity's ICT upgrade plans. The committee will also oversee the appointment of a replacement IT eonlractor once the ¢harWs long serving IT provider retires. The committee will continue to monf(or the perfomianc8 of the charty investment manageis and will receive reports and strategy updates in September 2023 and February 2024_ The charity will seek to move addi(ional funds into bonds though the investment managers shoukl condrtions be conducive. In February 2024 the charity will review the weekly maintenance charge proposal lo ensure the charity is balancing the financial capabilities of the residents against the long-lerm finanaal viability of the Charity. The committee will also look to move more of the charty's cash reserve into easy access investment accounts lo M8￿MIse the return of this money. The committee will work w((h charty's staff team and legal professions to finally complete the process of incorporation ensuring that the charity'5 registration with the Regulator for Social Housing is novat￿ to the new eorporate trustees, TUPE transfers are made for exiling staff and finalty requested a deed of united direction from the Charity Commis8ion. Finally, the charity will upgrade ils online banking systems lo better meet ils day lo day needs and avoid issue that have recently presented themselve5 regarding online payment limits. Frank Wayt Chair of the FIna￿e and Audit Committee Page 23 HARBORNE AND SMETHWICK CHARITABLE TRUST {A company Ilmited by guarantee) TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 3.0 Flnanclal review 3.1. Financlal Po$ltion The Charity's Income me recei 22-2 The Charlty's Expgndlturo mewass enl in 22-23 Financial Investment Income Income from Investment Propertie5 Housing Activities Other £163,636 £543,443 Grants Housing A¢fivtti'es £355,446 £1,045,227 £956,529 £361 Govemance Investment propety management Financial investment management £68,355 £331,851 £30.3C6 £1663,969 £1,831,185 Balance Shgot The value of assets (less liabilities) of the chaiity is shown below Housing Properties Land. fixtures & fittings Investments {stocks and $hares) Investment properties 3,680,038 648,469 5.168,656 11,143,000 Subtotsl 20620 163 Current assets less liabilities Credf(ors {due over more than one year} 1,942,464 (64,7191 Net Assets 22 497 908 3.2 Commentary on thg Accounts 2023 has been a challenging year for the charity. The cost of living crisis and investments in the charity's property portfolio have increased the charity's costs while the opportunities lo increase the charity's income have been more limited. Total ineome has increased by 6% from £1,568.349 in 2021122 to £1,663,969 in 2022123. Income growth has not kept pace with inflation over the same lime frame17.90hl and has been considerabty outstripped by experKliture costs wh￿h have risen 21 Yo from £1,510,657 to £1,831,185. This increase in expenditure includes £247,432 spent refurbishing void units in the charity's property investsment portfolio. These one-off costs will not be repeated in future years and on this basis the charty had budgeted a reduction in funds in 2022123,. the financial ￿sU￿$ are not unexpected and are indicative of significant investment in the charitys investment properties to secure higher ievels of future income. Page 24 HARBORNE AND SMETHWICK CHARITABLE TRUST (A company Ilmlted by guarantsel TRUSTEES. REPORT {CONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 The charills energy costs have also risen s￿n￿l¢ant1Y in 2022123 wth gas prices increasing from c.7plKWh to ¢.9plKVVh and electricity prices rising from c.16pA(Wh to e.23plKWh as contracts originally negolialed in 2016 finally come lo an end. Staff and central Costs have increased as well bul only in-line with inflation and have, in real temis, remained broad￿ static at £387,503 an increase of 44A. In year, the chanty has reduced its fin*ncKal position by £167,216. While the immediate problems and demands of 2023 have affected the eharitls in year operating posiiK)n the revaluation of the charity's propety Portfolio has InC￿aSed ils value by £929,417. Investment performance has continued lo present ChaI￿ngeS wtth the portfolio value reducing by £102,078 however it should be noted that in spite of theses unreleased losses inwme from the portfolio has hehl up well at £163,636. 3.3 Reserve$ 11 is the charity's policy lo hold 6 months, operating expenditure {£915,5921 and 12 months, maintenance expendi(ure1£221.8061 in reserve in the fomi of cash. As of 30 June 2023 the ¢harty was holtjing £2,145,864 in sh and ? total of £7,314.520 in either cash or easily liquidated investments. The charty holds £221,8C6 of this cash and £221,806 of these easily liquidated investments as a deswJnated planned maintenance fund. While the charity's reserves policy and planned maintenance funds only calls for £1,128.398 of cash and a further £221,806 of easily IH4uidated investments the Trustees are currently holding more in anlicipation of., Purchasing addrtional residents'al properties as detsiled In the report from the propety commiitee1£600,0001 Future refurbishment ol returned long term residential leases1£250.0001 Provision for risks identified on the risk fegisler. specifically welfare refomi and historic lease errors 1£200.0001 Taken together these provisions come to £2,178.398 which is closer to the charity's cash reserve. In light of these factors the charity's cash reserve does not seem excessive. Despf(e moving cash into short lem easy access accounts irb 2022r23 during 2023r24 the charity will aim lo move an additional £500.000 into 304ay notice account8 lo generate returns on what would otherwise be inactive money. Page 25 HAR80RNE AND SMEfHWICK CHARITABLE TRUST IA Gompany Ilmltsd by guarantsel TRUSTEES. REPORT {CONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 4.0 Value for Monoy Value for Money IVFMI is a￿ayS al the forefront when managing the delivery of our charitable mission and ¢bJ'ectives. For HPLC VFM is maximising our value to". enable our residents to live independently in an environment that improves their health and wellbeing, thus lessenir¥J the burden on the NHS by feducing the need for GP and hospital visits and admissions to care homes support our individual grant recipients through provision of necessities such as wh(£e g¢)ods and baby items assist local organisations in their attempts lo improve th8 health, welfare and employment opportunities of the inhabitants of the ancient parish and help them reach their full potential 4.1 Arrangements to Ensure VFM VFM drives our strategic objectives of risk, assets. Peop￿ and procurement. As such il runs through all aspects of our strategic plans. Progress 1$ rigorously monrtored al committee meetings and by the full board on a quarterty basis. The Finance & Audit Committee scrutinise all aspects of financial performance and ensures we have sound financial rules and regulations. Our relums on investment are benchmarked so that we can be certain that our stocks and shares are appropriate and perfomiing well. E¥penditure against bLsdget for all aspects of the charity is checked monthly by the Senior Management Team. Committee monitors the perfonnance of our non•soco1 housing and investment properties lo ensure a healthy balance of income and long-temi growth. The Almshouse Committee monitors void loss, arrears and repairs and maintenance in relation lo our five alrnshouses. We undertook our latest five-year stock condition suNey in 2019 and this has formed the basis of our planned maintenance programme over the n8xt few years. We continue lo lake a balanced view of mainlenance, realising the importance of keeping our properties al a high stsndard, so that they remain desirable and ensure Iw void rates, wrthoul carrying out work before rt is necessary. The almshouse committee also reviews large tendering activities to ensure that contracts are competitively tendered and that the charity is getting the best quality for the money it is spending. In 2023 the charity renewed ils electricity contracts. The charity had been in long term contracts since 2016 and had benefitted significantly from the exlension clauses built into these contracts The charty has been able agree a competitive green energy renewal however the rates have increased from 16plkWh to c. 23plkWh Icosls are aggregated over day and nwhl unilsl. While this is a subslanlial increase the charity has used its bulk purchasing power lo keep costs well below the eurrenl energy pnce cap prices of 27pthWh. The charty is a member of the SPBM Benchmarking Group which assesses our perfotmance against that of similar organis81ions and enables us to share good practice. The Ch ritable Activities Committee oversees our programme of organisation81 and indiv￿u81 grants lo ensure we are adhering to the charity's grants strategy, which outlines our key priorities for the year. These priorf(ies are regulady reviewed and altered over time according to identffied pattems of need established from local rv3ources such as ONS data and neighbovrhood plans. Any applications made to the charty are assessed against these priorities and only applications that demonstrate an ability to evidence these needs are funded. The committee received reports on the achievements each award m8de and compare the costs of each intervention against the number of benefiC￿rIeS rt supported and the impact (( achieved. Page 26 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) TRUSTEES, REPORT ICONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 4.0 Value for Money (continued} 4.2 Benchmark Ranklng The charty has compared ils perfornianee against local housing charities that form the SPBM Benchmarking group. The Charty has a combination of mandatory metrics from the Regulator for Social Housing IRSH} and other metrics shared across this group to assess ils ielative perfomiance. The resuhs of this comparison are detailed in the table below showing how this years perfomance compares lo last and giving a short narrative explanation of what the metric means and why the charities performance is what il is. Finally, the charty has included rts rank out of the 14 SPBM members.. IAS by thtr Règulator forSo¢ial Houslngl 1111 SPBM Rank ioth 141 20191al 2021122 2022123 T￿¥0 Expl•n•Uon Stoc* menaged 59 The totsl soual housing 51oGk monaged by thÈ charfty has remained uncknanged Sin￿ 2017118 NIA Tha Fwcentage of Income bstto vohjs lempty urnlsl has Increased. year the chanty had t4 voids.. 3 of these were intemal IranSfe￿ Internal IransfeT5 always 9ener81 Increase Voky weeks because the c*arity lose5 ¥OKI tsme fefurblshlng Ihe woperty and Ihe okj one. Void b5ses are cal(xJl3ted dtsentty to the ¥OKI and bad debt rnthG noted in thg reprytfrom tr* Mm5hou5e5 Crynmitteè Vokj kn88881%1 02 0.36 0.49 1.J3% 4th Ave. r¢-￿tUlle of 811 r&lels Idhysl A¥8￿ge re-lel limes have Increased This like betAuso oflhe htgh numterofinlem£l transfers Ihk3 year 20days Is Still wthin the tnjstees laryel of 21 18 20 2nd Rent colkctsd {% o¥charg8S du81 100.29 99.37 98.12% Rant Wl colloCt8d conthues lo be poth aTrJ percentage of chargB5 tkn h@5 Increased ￿￿J￿Ily. Current tenant arrear5 have rernained Ihe samB. Thls siluabon well thange On￿ InGreasEd engrgy prir*&take effeGt Current *nant a￿r8 {%} 037 00% Owrall The charSty's overall operalw rnaryin has improved. The underfyiry surplu5 ordefirAt of Ihtrthaiity has not fundamen181ty GharvJed however this yea¢s cabjlalions sre refiedve of the expèndlture malntain Ihe Ch8rity'$ Propert￿8. m•rgin fhl IRSH 1011 63.13 -24.05 -10 05% Page 27 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 30JUNE 2023 4.0 Value for Money (continued} IAS defin•d by th? Royulator lor Social Hom￿￿9> SPBM Rank lo￿ of 19120 2D20121 2021122 202Y23 Narra￿¥0 Explamtlon Sodal houslThJ ttings 0￿ra￿￿j margln (%) The Chari￿5 social housiny operaknny margin has ￿er￿aSed Thi5 15 refl£L*¥e ofthe incr￿$ed reinveslmenl in the thshouses and the cost of stafl thal are not tharged to resbyenls such as the support t)ffi¢*r. &58 -7 89% 6th IRSH 1021 E￿TOA MRI lasa pP￿￿tage of interestl The tharity's EBITDA MRI ra￿n0 has Imwoved beG%uÈe of the reduc*on in defidt Sn INS finanaal yèar. chanty maln181ns sufficient INuidity wrth 88rves In 8xc68$ of £2.000.000 1.53 146.63% 41.87% -19.54% NIA IRSH 1031 Gea￿n9 IRSH •nd $C￿e(x[￿ measwel The thaTity li)wgÈa￿d. The chaflty Is paylrrfj olt its one Ernax loan sk)wly and th80th8t8TrJw balan decre8se5 from yearto year The thanty has k)0￿￿ Into paying the Itsari ¢>ff earty bul redempJon wsts rnakethbs unet4wmKal. 49 16% 47% -$7.04% -56.85% NIA IRSH 2031 sw)pty of sodal hou urMtsdell¥er8d 1111 The tharity has not de¥ebped ariy 50rAal housirvJ unitsthK8 wr. The ch8ritywould like to devdop r￿5£￿81 ho￿lr￿j urHt5 bul requires greaterclarily rega￿1r￿j fijlure refotrns b8fore11 can comrnlt The is e6tablk5hed b8518 of hw r￿nllY unrfs Y￿re ad(Spd. percentage of total 80dal houskng units hdd f5t IRSH2041 11 Npw Supp ddivered Inor soth81 h(￿sing units New mEtri¢ The th?tty has notd8llver8d any n n0Tr50txal hou61ng units In 2021122 The ranklng bp5ed on how re￿nlY n2w non-sodal unitswer8 added to tyJrportfolK). Our ranki￿ shows tha charty added units most rettnly of our peers. NIA NIA 15( Rdn¥ethenl Re￿￿eSIrrenI irtre85ed sI￿ht￿ that the thatity ha5 b88n atAe lo restsrt Mmshousè capital prografftrne In fijll po* pandemic 4.69 0.86 0.98 275 2nd IRSH 3NI Retutn on Capital Empk)yed IROCEI % The retum M tspitsl employed is 8 negat￿?￿gUre because Of1￿ dtrfiuirAu&8d by the In¥estmènt l th& Ch*ity'S pYoper￿0s. 0.19% 4.12% 1.72% -0.74% 51h (RSH 4011 Page 28 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 4.0 Value for Money Icontlnued} IA8 doffned by the R•g¥tstor forSo¢l•l Hou•lngl $PBM Ron (Outol 2019M 2020r21 2021r22 2022123 Th8 tol81 headune cosi p8r So￿al houwry vnm has increased ￿Igh￿Y. This is refiective ofthe increased amount of<*yial spend and F&fU￿lsh￿￿ntS tr charity has ur￿8rtaken. The thanty's costs are often higherwhèn o)mpared to othervowd8￿ bec4u88 of the additional ())sl we carryto support and p￿￿de aclvthes lo our re￿dents. These costs are not P8ssed on to re￿dents snd are not HB elvJible m&8nino th8t Ihe£*arity's WMC r8maths competibve wllh the rost of oursectorwiih an a¥erage total Weekly charge of £177.64. We might alm051 describe ourselves as proud lo be eypensive here as we are ulilising cknarity's to provide and an hanGed setviGothat 90È6 ab¢￿ and bÈyond that of a •a￿ard shattered att￿MMod8￿0n provEder. Headline s¢xxal hou5iry rA)st perunit iiii £10,146 £9,085 £10,057 £11,440 5th IRSH $011 This will be the last year that the chanty uses this suite of Vfm metrics in this form. In 2023r24 the charty will stsrt using new lenanl satisfaction measure5 as part of the Vfm statement however, while comparator tjata may c&qse lo be available the charity will conts'nue lo report of performance against some of these metrics 88 we think they are relevant in assessing the over performance of the charty. Disclosure of information to audiior Each of the pe￿onS who arg Trus188$ al the time when this Trustees, report is approved has confirmed that.. so far as that Trustee is aware. there is no relevant audit infomialion of which the charrtable group's auditor is unaware, and that Trustee has taken all the steps that ought to have been taken as a Truste8 in order to be aware of any relevant audit infomation and to 8slablish that the charitabl8 group's auditor is aware of that information. Audltor The auditor, Crowe U.K. LLP, has indicated his willingness lo continue in office. The designated Trustees will propose a motion reappointing the auditor al a meeting of the Trusleé$. Trustees, report, incorporating a strategic report, was approved by order of the membets of the btsard of Trustees and signed on the board's behalf by." MrD Chaiman Date.'20 rch 202 Page 29 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) STATEMENT OF TRUSTEES. RESPONSIBILITIES FOR THE YEAR ENDED 30 JUNE 2023 The Trustee5 (who are also the directors of the Charity for the purposes of ￿MpanY lawl are fesponsible for Pre￿Ilng the Trustees, report and the financial statements in accordance with applicable law and Unrted Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practi￿1. Company law requires the Trustees to prepare financial statements for each financial year. Under company L8w. the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the slate of affairs of the Group and the Charity and of their incoming resources and application of resources, including their income and expenditure. for that period. In preparing these financial stslemenl$. the Trustees are required to.. select suilabk accounting polrcies and then apply th￿ consislenlly.. observe the methods and principles of the Charities SORP IFRS 1021", make judgements and acwunling estimates that are reasonable and prudent., slate whether applicable UK Accounting Standards IFRS 102} have been followed, subject to any material departures disclosed and explained in the financial statements., prepare the financial statements on the going concem basis unless il is inapproprrale to presume that the Group will continue in business. The Trustees are ￿spOnSible for keeping adequate accounting records that are sufficient to show and explain the Group and the Charitls transactions and disclose with reasonable accuracy at any time the financial posrtion of the Group and the Charity and enable them lo ensure that the financial ststements Compty ￿th the Companies Act 20CE. They are 0150 responsible for safeguaréing the assets of the Group and the Charity arKI hence for tsking reasonable Steps for the prevention and detection of fraud and other irregularities. Approved by order of the members of the board of Trustges and signed on ils behalf by.. Mr Chairman Dale." 20 h202 Page 30 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARBORNE AND SMETHWICK CHARITABLE TRUST Opinion We havè audited the financial statements of Harfoorne and Smethwick Charitable TrLtsl (the 'parenl charitable company'l and Its subsidiaries Ilhe group'} for the year ended 30 June 2023 which comprise the Consolidated ststement of financial activities, the Consolidated balance sheet, the Charity balance Sheet, the Consolidated Statement of cash flows and the related notes, including a summary of signifieant accounting polieies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financi81 Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of IrelarKI' (United Kingdom Generally Accepted Accounting Practice). In our c¢)inicm the financial stalement$.' give a true and fair view of the slate of the Group's and of the parent charitable company's affairs as at 30 Juno 2023 and of the Group's incoming resources and application of resources. including ils income and expendiiure for Ihe year then ended., have been properly prepared in a¢wrdance wth United Kingdom Generally Accepted Accounting Practice,. and have been prepared in acCOrdar￿ wlh the requirements of the Charities Act 2011. Basis for oplnlon We conducted our aLKlil in accordance with International Standards on Audrting {UKI IISAS IUKI} and applicable law. Our responsibilities under those standards are further described in the ALtdilorfs responsibilities for the audit of the financial slalemenls section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant lo our audit of the financial statements in the United Kingdc¥n. including the Finanual Reporting Council's Ethical Stsndard, and we have fulfilled our other ethical responsibiif(ies in accordance with these requirements. We beI￿ve that the audit evidence we have obtained is sufficient and appropriate lo provide a basis for our opinion. Concluslons relatlng to golng Concgrn In audi(ing the financial slalemenls, we have concluded that the Trustees, use of the going concem basis of accounting in the preparation of the financial slalemenls Is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating lo evènts or conditions th81. individually or collectively, may east signrficanl doubt on the Group's or the parent charitable company's ability lo continue as a going concern for a period of al lea51 hvelve months from when the financial statements are aulhorised for issue. Our responsibilities and the responsibilities of the Trustees with r￿pect to going con¢ern are degcribe(l in the reievant sedions of this report. Page 31 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limlted by guarantee) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARBORNE AND SMETHWICK CHARITABLE TRUST ICONTINUEDI Other Infomiatlon The other information comprises the information included in the Annual report other than the financial statements and our Auditor's report thereon. The Trustees 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 lo the extent othernise explicitly staled in our report, we do not express any fonn of assurance conclusion thereon. Our responsibility is lo read the other information and, in doing so, consider whether the other infomiation is malerialty inconsistent wf(h the financial slalements or our knowledge obtained in the course of the audit, or otherwise appears lo be rnalerially misslaled. If we rdenlify such material inconsistencies Of apparent material misstalemenls, we are required to deternine whether this gives ris8 to a mat&rial misslalemenl in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other infomialion. we are required to report that fact. We have nothing lo report in this regard. Matters on whlch we are roquirgd to report by exceptlon We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us lo report lo you if, in our opinion.. the infomation given in the Trustees. report is inconsistent in any material respect wf(h the finaneial statements., or the parent charitable company has not kept sufficient accounting records., or the parent charita)le company financial slalements are not in agreement with the accounting records and return5,' or we have not re￿iVed all the infomialion and explanations we require for our audit. Responsibilities of trustees As explained more fully in the Trustees. responsibilities statement, the Trustees (who are also the directors of the charitable company for Ihe purposes of company lawl are responsible for the preparation of the financial slalemenls and for ￿Ing satisfied that they give a true and fair view, and for such intemal control as the Trustees detemine is necessary to enable the preparation of financial slalemenls that are free from material mFssL*ement, whether due to fraud or error. In preparing the financial Statements, the Trustees are responsible for a$5e$sing the Group's and the parent charitable company's abilty to ￿ntinUe as a going concern, disdosing, as applicable, mattets related lo going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the Group or the parent chantable company or to cease operations. or have no realistic altemalive but lo do so. Page 32 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company Ilmlted by guarantee) INDEPENDEIU AUDITOR'S REPORT TO THE MEMBERS OF HARBORNE AND SMETHWICK CHARITABLE TRUST ICONTINUEDI Auditorfs responslbllltles for thg audit of thg finan¢ial sL*ements We have been appointed as auditor under section 151 of the Charities Ad 2011 and report in aeeordance with the Act and relevant regulations made or having effect thereunder. Our ctsjective$ ar8 to obtain reasonable assurance about whether the financial statements as a whole afe free from material misstalemenl, whether due to fraud or error, and to issue an Audilorfs report that ineludes our opinion. Reasonable assurance is a high level of assurance, bul is not a guarantee that an audit conducted in accordance with ISAS IUKI will always delecl a material misstalemenl when il exists. Misslatemenls can arise from fraud or error and are considered material if, individually or in the aggregate. Ihey could reasonably be expected to influence the economic decisions of users taken on the basis of these finaneial slatemenls. Irregularities, including fraud, are Instan￿ of non-compliance wtth laws and regulations. We design procedures in line wi(h our ￿SponSIbl1ff(ies, outlined above, to delecl material misslalemenls in respect of irregularf(ies, including fraud. The extent to which our procedu￿ are capable of detecting irregularities, including fraud is detailed below.. Obtsining and understanding of the legal and regulatory frameworks that the Charity operates in, focusing on those laws and regulations that have a direct effect on the financial ststements., Enquiring of management and Trustees around known or suspected instsnces of nonwcc*npliance of laws and regulations and fraud., Discussing among the engagement team regarding h¢)w and where fraud might occur in the financial slalemenls and any potential indications of fraud., Reviewing minutes of meetings of those charged with govemance., Reviewing Financial Statement disclosures and testing lo supporting documentation to assess compliance with applicable laws and regulations., and Perfom)ing audft work in relation lo the risk of management override, including testing of joumal entries and other adjustments for appropriateness and reviewing accounting estimates for bias. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularilie5, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or reguLelion is removed from the events and transactions reflected in the financial slatemenls, as we will be less likely lo be￿me aware of instances of non-compliance. The risk is also greater regarding irregularrties occurring due to fraud rather than error, as fraud inVo￿e$ intentional concealment. forgery, collusion. omission or misrepresentstion. A further description of our responsibilities for the audit of the financial stslemenls is located on the Financial Reporting Councifs website at.. www.frc.o -ukJauditorsre nsibililies. This description foms part of our Auditorfs report. Use of Ouf roPQrt This report 15 made solely to the tharitable Company's trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state lo the charitable companvs Irusteo$ those matters we are required lo slate to them in an Auditorfs report and for no other purpose. To the fullest exient permits.ed by law, we do not accept or assume responsibility lo anyone other than the charitsble company and its memb8rs, as a body, for our audrt work, for this rèport. or for the opinions we have fom)ed. Page 33 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company Ilmlted by guarantee) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARBORNE AND SMETHWICK CHARITABLE TRUST ICONTINUEDI Crowe U.K. LLP Stalulory Auditor Black Country House Rounds Green Road Oldbury Wesl Midlands B69 2DG Date.. 22 March 2024 Crowe U.K. LLP are elsgible lo act as auditors in tem$ of section 1212 of the Companies Act 2L￿. Page 34 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES {INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 30 JUNE 2023 Unrestricted Endowment fund$ funds 2023 2023 Total funds 2023 Tofal funds 2022 Note Incomg and endovmients from: Charitable actimties Investments Other income 9S6,530 707,079 361 956,530 707.079 361 901,029 667,318 Total Income and endowments 1,663.970 1,663,970 1.568.349 Expenditure on.. Raising funds Charitabte activities.. Housing activities Grants in relief in need Governance costs 28,325 347,033 375,358 237. t88 916,077 355.446 68.355 115,953 1,032,030 355.446 68,355 962,414 253,590 57,463 Totsl expenditure 1.368.203 462.986 1,831.189 1,510,655 N•t incomel{expenditurel before net Ilossesvgains on investments Net Ilossesllgains on investments 295.767 {33.3391 1462,9861 891.501 (167,2191 858.162 57,694 {434,950) Net movement in funds 262,428 428.516 690,943 (377,256) Reconciliation of funds,. Total funds brought fO￿ard Net movement in funds 6.242,778 262,428 15,$64,185 428,515 21,806,963 690,943 22, 184,219 (377,256J Tt)tal funds earrfed forward 6.505,206 15.992.700 22.497.906 21,806,963 P4e 35 ## **HARBORNE AND SMETHWICK CHARITABLE TRUST** ## **(A company limited by guarantee) REGISTERED NUMBER: 11217433** ## **CONSOLIDATED AND CHARITY BALANCE SHEETS AS AT 30 JUNE 2023** |**Note**
**Fixed assets**
Tangible assets
12
Investments
14
Investment property
13
**Current assets**
Debtors
16
Cash at bank and in hand
**Current liabilities**
Creditors: amounts falling due within one
year
17
**Net current assets**
**Total assets less current liabilities**
Creditors: amounts falling due after more
than one year
18
**Total net assets**
**Charity funds**
Endowment funds
19
Restricted funds
19
Unrestricted funds
19
**Total funds**|**_2023_**
**Group**
**£**
**4,308,505**
**5,168,657**
**11,143,001**
**20,620,163**
**166,156**
**2,145,863**
**2,312,019**
**(369,557)**
**1,942,462**

**22,562,625**
**(64,719)**
**22,497,906**
**15,992,700**
**-**
**6,505,206**
**22,497,906**|**_2023_**
**Group**
**£**
**4,308,505**
**5,168,657**
**11,143,001**
**20,620,163**
**166,156**
**2,145,863**
**2,312,019**
**(369,557)**
**1,942,462**

**22,562,625**
**(64,719)**
**22,497,906**
**15,992,700**
**-**
**6,505,206**
**22,497,906**|**Charity**
**£**
**-**
**-**
**-**
**-**
**- **
**-**
~~**--**~~
**- **
**-**
**-**
**-**
**-**
**-**
**-**
**-**|_2022_
Group
Charity
£
£
_4,343,731_
-
_5,270,735_
-

_10,213,584_
-
_19,828,050_
_123,375_
-
_2,190,960_
-
_2,314,335_

_(269,868)_
-
_2,044,467_
-
_21,872,517_
-

_(65,554)_
-
_21,806,963_
-
_15,564,185_-
_-_
-

_6,242,778_
-
_21,806,963_
-| |---|---|---|---|---| |||||| Page 36 HARBORNE AND SMETHl•VICK CHARITABLE TRUST IA company limited by guarantee) REGISTERED NUMBER: 11217433 CONSOLIDATED BALANCE SHEET {CONTINUEDI AS AT 30 JUNE 2023 The Charity was entitled lo exemption from audit under section 477 of the C(xnpanies Act 2006. The members have not required the entty to obtain an audrt for the year in question in accordance with Section 476 ofthe Companies Ael 20C6. However, an audit is required in accordance with section 151 of the Charities Act 2011. The Trustees acknowledge their responsibilities for comptying with the requirements of the Act with respect to accounting records and preparation of financial statements. The financial statements have been prepared in accordance wrth the provisions applicable lo entities subject to the Small companies regime. The financial slalements were approved and authorised for issue by the Trustees and sjgned on their behaK by.. Trijs Dale." 20 Ma 202 The notes on pages 39 to 58 fom part of these financial slalemenl$. Page 37 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guaTantee} CONSOUDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2023 2023 2022 Cash flows from opeTating activitieg Net cash used in operating actwrti8$- Note 21 1677,4981 (349,329) Cash flows from inve6tlng actlvltles Dividends, inleresl$ and rents from investments Purchase of tsngible fixed assets Proceeds from sale of investments and investment propety Purchase of investments and investment property 707.079 1100.524} 667,318 (33,253) 351,560 (424,847) 1436.7191 Net cash provlded by invgsting acti¥itle5 614,342 560,778 Cash flows from finanelng actSvitSes Repaymenls of borrowing (8351 (756) Net cash ￿ed in flnanclng actlvltles (8351 1756) Change In cash and Gash equivalents In the year Cash and cash equtvalenls at th8 beginning of the year 163.9911 2,237,002 210.693 2,026,309 Cash and cash oqulvalents at the end of the year- Nots 22 2.173.011 2,237,002 The notes on pages 39 to 58 fomi part of these financial slalements Page 38 HAR8ORNE AND SMETHWICK CHARITABLE TRUST IA company 5imited by guarante81 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 General infomiatlon The Harbome and Smethwick Charitable Trust is a private company limrted by guarantee registered with the Charity Commission and Companies House in England and wa￿S. Ils registerwj offtce is 109 Court Oak Road. Harbome, Bimiingham, B17 9AA. The nature of the operations and principal actwities are relwing need in the ancient parish of Harbome. Aeeountlng pollcles 2.1 Basls of preparatlon of flnanclal statements The financial slalemenls have been prepared in accordance with the Charf(ies SORP IFRS 1021- Accounting and Reporting by Charities.. Statement of Recommended Practice applicable lo charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 leffeclive 1 January 20191, the Financ￿1 Reporting Stsndard applicable in the UK and Republic of Ireland IFRS 1021 and the Companies Act 2006. Hart)orne and Smethwick Charitable Trust meets the defin(tion of a public benefit entity under FRS 102. A5sel$ and liabilities are initially recognised al historical cost or transaction value unless otherwise slated in the relevant accounting policy. The Consolidated statement of financial activities ISOFAI and Consolidated balance $ho&t consolidate the financial statements of the Charity and SLFbsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis. The Charity has taken advantsge of the exemption all¢)wed under section 408 of the Companres Act 20￿ and has not presented ils own Slalemenl of financial activities in these financial slalomenls. 2.2 Income All income is recognised once the Charity has entrtlemenl to the income, il is probable that the inwme will be reeeived and the amount of income receivable can be measured reliably. Income from housing activities represents rental and sejvice charges income receivable in the year net of rent and seryice charges losses from voids. Investnienl income from investment properties is recognised as il falls due. DivIder￿S and interest income is recc4Jnisod as the Charills rKJht lo receive payment is estsblished. Rèntal income from investment PrO￿rtieS is rewgni$ed on a receNable basis. Page 39 HARBORNE AND SMETHWICK CHARITABLE TRUST {A company limited by guaranteo) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Accounting pollcles Icontlnuedl 2.3 Expenditure Expendtture is recognised once there is a legal 01 constructive obligation lo transfer economic benefit to a third party, il is probabFe that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditu￿ is classified by aclivty. The ￿$t$ of each activity are made up of the total of dired costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable lo a single activity are allocated directly to that activty. Shared costs which contribute lo 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, and depreaalion charges allocaled on the portion of the as$8t'$ u$e. Support costs are those costs incurred directly in support of expenditure on the objects of the Charity. Governance eosls are Ih05e incurred in connection with adminis*ralion of the Charity and ￿MplianCe with consilulional and slalulory requirements. Co$1$ of generating funds are costs incurred in managing investment assets. Investment management costs are apportioned betsyeen ftjnds based on the percentsge of the relevant assets held in the fund. Charftable activities and govemance costs aTe costs incurred in the Charitls operations. inclLsding support costs and ccists relating to the governance of the Charty apportioned lo charitable actwities. Grants payable are charged in the year when the offer is made except in those cases where the offer is conditional, such grants being recognised as expendf(ure when the condrtions att￿hIng are fuffilled. Grants offered subject to conditions which have not been met at the year end are noted as a commitment, bul not accrued as expenditure. All expenditure is inclusive of irrecoverable VAT. 2.4 Tangible fixed assets and depreclatlon Tangible fixed assets lin¢luding social housing properties) are carried al cost lor deemed c05tl, net of depreciation and any prowsv)n for any impaimienl. Cost includes costs directly attributsble lo making.the asset capable of operating as intended such as the cost of acquiring land and buildings, development costs, interest charges on loans during the devel¢Jpment and expenditure on improvements. Expenditure on improvements will only be capitalised when it results in incremental futu￿ benefits such as increasing rental income, reducing maintenance costs or resulting in a significant extension of the useful e￿noMiC lrfe of the property. Housing propert*s in the course of constwction are induded al costs incurred lo date. Depreciation on these assets is not charged until they are brought into use. Major components of housing properties, such as lifts and warden alarm systems have been accounted for and depreciated separately from the connected housing propety, over their expected useful economic lives. The useful economic lives of tangible fixed assets are reviewed annual￿. Page 40 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company Ilmlted by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Aecountlng pollcles {contlnugd) 2A Tangible fixed assets and depre¢iatlon {contlnuedl Depreciation is charged so as to allocate the cost of tangible fixed assets less their resKYual value over their estimated useful lives. Depreciation is provided on the following bases.. Land Office building F￿tureS and frttings Computer equipment Roof structure and covering Windows and extemal doors Healing Kitchens Bathrooms Mechanical Electrical Lifts - Not depreciated - 20 years -7yea - 3 years - 70 years 30 years -8-15years 20 years 30 years 30 years 40 years - 20 years 2.6 Invostmonts Fixed asset investments are a fomi of financial instrument and are inrtially recognised at their transaction cost and subsequently measured at fair valu8 at the Balance sheet date, unless the value cannot be measured reliably in which eage r( is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as 'GainsllLosse$l on investments, in the Consolidated statement of financial aclivilies. 2.6 Investment property All investment properties are included at market value. Any Changes in fair value are recognised in the Statement of Financial Aetivilies. Properties rented lo provide social housing are treated as tsngible fix&J assets and not investment properties. 2.7 Flnancial Instruments The Charity only has financial assets and financial liabilities of a kind that qualfy as basic financial instruments. Basic financial instruments are inf(ially recognised al transaction value and subsequent measured al their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method. 2.8 Debtors Trade and other debtors are recognised at the settlement amount. Prepayments are valued al the amount prepaid nel of any trade discounts due. Page41 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Accounting policieg Icontinuedl 2.9 Cash at bank and in hand Cash al bank and in hand includes cash and short4emi highly liquid investments wi(h a short maturity of thrèe months or less from the date of acquisition or opening of the dep05il or similar account. 2.10 Llablllties and provisions Liabilit￿$ are recognised when there is an obligation al the Balan￿ sheet date as 8 result of a past event, il is probable that a transfer of economic benefil will be required in settlement, and the amount ol the settlement can be eslimaled reliably. Liabilities are recognised at the amount that the Charity antKipales rt will pay to Sett￿ the debt or the amount il has received as advanced payments for the go¢xis or seNiee$ rt must provide. ProViS￿n$ are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the lime value of money is material, the provision is based on the present value of Ih¢)se amount5, discounted al the pre4ax discount rale that reflects the risks specific to the liability. The unwinding of the discount is recognised in th8 Consolmlaled statement of financial activities 88 a finance c05t. 2.11 Flnanclal Instruments The Group only has financkgl assets and financial liabilities of a kind that qualify as basic financial inslrumenls. Basic financial instruments are initially recognised al transaction value and subsequently measured al their settlement value wth the exception of bank loans which are subsequently measured al amortised cost using the effective interest method. 2.12 Pensions The Charity operates a defined contribution pension scheme and the penS￿n chargo represents the amounts payable by the Charty to the fund in respect of the year. 2.13 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 Group and which have not been designated for other purposes. Endowed funds are those fLtnds which are available for use in 8ccordance with tho wishes of the funder or regulatory body. Endowment fund5 represent grfts where the income may be used for general charitable purposes bul the capital must be retained. Income generated from permanently endowed assets is allocated lo unreslrieted ineome. Gains and losses on those assets are attributed to the endowment fund. Where income funds are used to build, extend or improve buiklings which are endowed properties or on endowed land, then the enhancement to the asset will be included within the endowment fund. Page 42 HARBORNE AND SMETHWICK CHARITABLE TRUST {A company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Crlllcal accounting estimatss and areas of Judgement Estimates and judgements ar8 continually evaluated and are based on historical experience and other factors, including expectations of future events that are believe(S to be reasonable under the cir¢umstanees. The Charity has made the folbwing estimates and assumptions that have 8 signrficanl impact on the amounts recognised in the financ￿[ statements.. Useful lives of buildings and components - this is assessed based on experience and best prarti￿ in the sector. The useful lives are regularly reviewed. ValuatTon of investment propert￿$ fair value 1$ assessed based on a combination of professional opinion, market values. actual occupancy and knowledge of the I￿al area. Critical areas oljudgement.. Permanent endowment funds - due lo the age of the Charty and changes in modem day regulatTon. the Trustees are aware that il is difficult lo aseertain with certainty the absolute values and components of the pemanent endowment funds. They have applied judgement lo the split of assets and allccation and apportionment of eligible costs to Ih¢)se funds based on historic evidence and practice. Valuation of investment properties - the Trustees consider the assessment of the valuation of investment properties to be a key area of judgement, with the factors impacting upon this assessment being outlined above. Income from charitable aetlvitles Unrestricted funds 2023 Total funds 2023 Rent charges receivable servi￿ charges receivab Utilities recharges 561,900 284.499 110,131 561,900 284,499 110.131 Total 2023 956,530 956,530 Page 43 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company1Smlted by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 In¢ome from charitable activities Icontlnuedl Unrèslncted funds 2022 Total funds 2022 Rent charges receivable SeNice charges receivabkg Utilitiès re¢harges 535.618 265,370 l¢XI,041 535,618 265.370 100.041 Total 2022 901,029 901,029 Investment Income Unrestrlcted funds 2023 Totsl funds 2023 Rental income from investment properties DNidends and interest receivable 543,443 163,636 543,443 163.636 Total 2023 707,079 707,079 Unreslncfed funds 2022 Total funds 2022 Rental income from investment properties Dbvidends and interest receivable 529,058 138.260 529,058 t38,260 Tolal 2022 667,318 667,318 Page 44 HARBORNE AND SMETHWICK CHARITABLE TRUST IA Cornpany limited by guarants8} NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Investment managernent costs unrestri￿8￿ Endowmgnt funds fund$ 2023 2023 Total funds 2023 Repairs Insurance Legal and property management fees Agent's commission Investment management fee 7,819 249 437 1,848 17.972 252,813 8,047 14,118 59,721 12,334 260.632 8.296 14.SSS 61,569 30.306 Total 2023 28,325 347,033 375,358 Unrestiicted Endowment fvnds funds 2022 2022 Total funds 2022 Repairs Insurance Legal and propety management fees Agent's commission Inveslmenl management fee Voids 4,680 225 451 787 151.336 7,265 14,559 25.451 13, 159 98 156.016 7.490 15,010 26,238 32,333 toi 19, 174 Total 2022 2&320 211,868 237,188 Anatysis of grants Grants to Grants to Institutlons Individuals 2023 2023 Totsl lunds 2023 Grants for relief in need 230,259 71,313 301.572 During thé year, 164 (2022.. 72) grants were awarded lo individuals referre11 to the Charity by agencies in Bimiingham and Sandwell. Page 45 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company Ilmltsd by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Analysls of grants Icontinuedl Grants to Inslitutions 2022 Grnnts to IrJdividu81s 2022 Tot funds 2022 Grants for relief in need 163, 715 41,331 205,046 Analysis of expenditure on charitable activities Summary by fund type Unrestricted Endowment funds funds 2023 2023 Total 2023 Housing activitie$ Grants for relief in need 984.432 355,446 115,953 1.100.385 355,446 Total 2023 1,339,878 115,953 1A55.831 Unreslrictgd Endowment funds funds 2022 2022 Tot 2022 Housing activitKg$ Grant8 for reiief in need 895,558 253.592 124,317 1,019,8T5 253,592 To1812022 1. 149, 150 124.317 1,273.467 Included wthin housing activities is govemance costs of £44,901 (2022.. £57,463). See nole 9 for details. Page 46 HARBORNE AND SMETHWICK CHARITABLE TRUST IA company limit8d by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Analysis of expendlture by activitles Adivitios undertakon directly 2023 Grant funding of actlvltles 2023 Support costs 2023 Total funds 2023 Housing actimties Gfanls for relief in need 1,032,030 68,355 53,874 1.100.385 355.446 301,572 Totsl 2023 1,032.030 301,572 122,229 1ASS.831 Activiti&s undertaken diwlly. 2022 G￿nt funding ol activilies 2022 Support costs 2022 Total funds 2022 Housing activities Grants for relief in need 962.412 5T,463 48,546 1.019.875 253.592 205,046 Tot812022 962.412 205.046 106,009 1,2T3,467 Anatysls