2022-12-31-accounts - Mr Willats' Charity

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REPORT AND FINANCIAL STATEMENTS for the year ended 31 December 2022

Charity no: 202269

Mr Willats’ Charity LEGAL AND ADMINISTRATIVE INFORMATION

Governing document and constitution

The Charity was set up under an Indenture dated 13 November 1858 by Mr William Willats. Mr Willats’ Corporate Trustee Ltd (MWCTL) is the sole Trustee of Mr Willats’ Charity. The Charity has the working title of ‘The Willats Trust’. The individuals that served as Directors to the Corporate Trustee during the year are detailed below:

Directors of the Corporate Trustee

Mr R Brown (Removed by Resolution of the Board 21 September 2022) The Rev’d. R Driver (Appointed as acting Vice Chair 13 February 2022) Mr T Friend The Rev’d. Dr M Ifode-Blease (Appointed as acting Chair 13 February 2022) Mr P LeRoy Mr P V Lindon (Resigned 31 January 2022)

All appointments and resignations during the year or up to the time of the signing of these accounts have been noted.

Clerk and Receiver to the Corporate Trustee and its Directors

Mr Q T S Elston (Resigned 8 September 2022)

Interim Director

Mrs A Anketell (Appointed 7 August 2023)

Property Manager

Mrs E L Palfreyman

Grants Administrator

The Rev’d. Méri Schoeman

Administrator

Mrs Sarah Heavens (Maternity cover provided from 10 January 2023 to 14 October 2023)

Principal office Website Basement 19 Rivers Street www.willatstrust.org Bath BA1 0AQ

Solicitors

Bankers Solicitors C Hoare & Co Thrings 37 Fleet Street 2 Queen Square London EC4P 4DQ Bath BA1 2HQ National Westminster Bank plc Royds Withy King 39 Milsom Street 5-6 Northumberland Buildings Bath BA1 1DS Queen Square Bath BA1 2JE

Auditors

Saffery LLP St Catherine’s Court Berkeley Place Bristol BS8 1BQ

Investment managers

Cazenove Capital 1 London Wall Place London EC2Y 5AU

Mr Willats’ Charity TRUSTEES’ REPORT for the year ended 31 December 2022

OBJECTIVES AND ACTIVITIES

Mr Willats’ Charity was established in 1858 by its Founder, William Willats, to support Christian workers to share the good news about Jesus Christ in some of most marginalised communities in the UK. The Charity achieves this by contributing towards the salary of lay pastoral workers (‘Guides’) in the form of grants. To fund the objectives of the Charity, the Founder created a sizable endowment by bequeathing a significant property portfolio to the Charity. This is managed by the Charity and the surpluses generated through investment income are used to fund the grants given to ‘Guides’. ‘Guides’ may apply for funding for a grant for a three-year appointment. There are two application cycles per year, in the spring and the autumn.

ORGANISATIONAL STRUCTURE

The Charity is governed by a sole ‘Corporate Trustee’ entitled Mr Willats’ Corporate Trustee Limited (MWCTL). The Directors of the Corporate Trustee are the Trustees of the Charity.

The Board of Directors (“the Board”) has delegated the day-to-day running of the Charity to its Clerk & Receiver (“Clerk”), to the Property Manager and to the Grants Administrator, all of whom are employees of the Charity. They are supported in their roles by specialist professional contractors who provide services to the Charity as and when they are needed. The Board meets regularly to consider the business of the Charity including the consideration of applications for grants and to receive reports from the Guides, the Clerk & Receiver, the Property Manager, the Grants Administrator and the Charity’s professional contractors. Following the resignation of the Clerk on 8 September 2022, the Board has appointed a new Interim Director with effect from 7 August 2023 and will be reviewing the organisational structure to ensure a smooth transition to a new operational lead.

APPOINTMENT OF DIRECTORS TO THE CORPORATE TRUSTEE

The Directors who have served during the year, and since the year end, are set out on page 1. Directors are appointed by the existing Board.

ACHIEVEMENTS AND PERFORMANCE

The day-to-day operations of the Charity

The Charity’s Grant Making Activities

The Board sees strategic partnerships with organisations wishing to appoint people to undertake work that fulfils the Founder’s intentions, albeit in a more modern context, as being key to ensuring that the Charity makes the most effective use of its grants. Thus, it will continue to seek such partnerships.

During the year, the Charity supported a total of 62 Guides working across the country. The work of these guides focusses on bringing the Good News of the Gospel to communities with little or no experience of or interaction with the Christian faith. We receive progress reports from guides bi-annually and also speak to our partner organisations about their circumstances. Guides report on the number of people they helped, activities delivered and beneficiary outcomes. They also provide Beneficiary Case Studies. These reports provide valuable information on issues our Guides are facing and on progress of work supported by Grants. Through this information we can also identify some consistent emerging themes. Both the existing work of the Guides and new applications highlight the increasing numbers of people and children in need. The pandemic and the cost-of-living crisis has compounded pre-existing trends of deprivation.

The Grants Administrator conducted remote visits to all guides during 2022. These visits are very much valued by Guides and provide opportunity to engage, connect, and share stories. Each Guide is also given individual feedback on the progress reports they submit throughout the year.

This year the Charity awarded a total of 18 Grants. The total amount awarded to Guides in 2022 was £250,000 (2021: £313,326) See note 1 of the accounts for more details. Of these applications, 12 were from organisations the Charity has already worked with. Grants were given to 6 new organisations with whom the Charity has not previously supported.

Mr Willats’ Charity TRUSTEES’ REPORT ( continued ) for the year ended 31 December 2022

The day-to-day operations of the Charity (continued)

The Charity’s Grant Making Activities (continued)

At the end of the year the Grants Administrator took maternity leave. A maternity cover was appointed in 2023 to maintain contact with the Guides and ensure a smooth process for the application process. The Board received reports from its Guides, gaining insights into the work that the Charity supports. In addition, the information gathered will help the Board in formulating any future grant making strategy.

A review of the Charity`s Grant giving process was undertaken during the year. A survey questionnaire was sent to all Guides regarding the application process. The information collected in this survey has given the Charity some helpful and valuable insight into areas of improvement both in terms of the application process and also the building of relationships with our guides and partner organisations.

The Charity’s Properties

As in the previous year, the Board sets a budget at the start of the year with the intention of ensuring that the unrestricted funds maximise income from investments and minimise its direct and indirect costs. The Board is pleased to report that the Charity’s investment income, both from properties and other investments, met the budgeted expectation with income of £1,330,604 achieved in the year (2021: £1,277,412).

The Charity owns a number of substantial Georgian listed properties in Bath, a UNESCO World Heritage City. The properties continue to provide a healthy income for the Charity to support its ‘Guides’, the Charity’s primary beneficiaries. Given the geographical location of the properties, they require considerate, careful and sympathetic planned maintenance and refurbishment. There remain some residential properties that are in need of refurbishment and modernisation before they will be in a position to be let at their full market rent, but progress continues to reduce their number. In addition, a few of the residential properties continue to be let to ‘Protected Tenants’ who enjoy a high degree of statutory protection and a restriction upon the rent that can be levied. The Board expects that over the coming years the number of such tenants will continue to decline.

When considering the need for and any plans for refurbishment of a property, the Board will base its decisions upon information relating to the current market value, anticipated costs of refurbishment and rental income arising thereafter of each of the relevant properties, in essence, the return on investment. The Board is well-served by professional advice in this regard and plan to continue to review the Charity’s existing properties as and when necessary and possible with a view to maximising the Charity’s rental income and grant expenditure.

The letting and rent reviews of the Charity’s residential properties have been handled by the Trustees’ Property Manager, with additional assessments conducted when required or advised to ensure that properties are let at the market rate. The properties are advertised on the Charity’s web site and through external letting web sites. This has proved very successful. The Trustees are pleased to report that the vacancy rate and turnover periods are very low. Moreover, the Charity has many repeat tenants. Providentially and through the good stewardship of the Board and the Charity’s staff, the Charity has a reputation of being a good landlord. Recommendations are often made by current and former tenants which results in many of the Charity’s properties being let through word-of-mouth.

Achievements during 2022 include:

The Charity has 20 student properties let to the Universities and Norland Nannies College. During 2022 lettings were agreed for all properties for the next academic year 2023/24;
During the year there were a number of re-lets made including to some of the Charity’s longer-term tenants. This has allowed for rents to be adjusted in these units to market value;
In 2022 Fire Risk Assessments were undertaken in all of our Residential properties with 100% meeting requirements;
The Charity continues to receive positive feedback from tenants on its customer service and repair response times.

Mr Willats’ Charity TRUSTEES’ REPORT ( continued ) for the year ended 31 December 2022

FUTURE PLANS

The focus of the Charity in 2023 will be two-fold: to ensure stable and effective operational leadership and to begin a strategic review to ensure that the Charity continues to meet its objectives and reach the maximum number of beneficiaries. This will include the appointment of a new Interim Director, following the resignation of the Clerk on 8 September 2022.

A review of our grant strategy will begin in late 2023. This review will include implementing learning from feedback on the application process. It will also include a focus on geography, grant award amounts and criteria for awards. The Charity also intends to review how it begins to work more strategically with its partner organisations.

A full valuation of our property portfolio took place in 2023, alongside a comprehensive stock condition survey. The information from these reviews will enable the charity to develop an investment strategy. Any new strategy will encompass identification of properties for disposal, the appropriate investment in remaining properties and diversification of the Charity’s investment portfolio. The core objectives for any new Strategy will be the long-term financial sustainability of the Charity and the impact it can make through the grants it awards.

The Recruitment of an Interim Director took place in 2023, in order to strengthen the leadership of the Charity. A review of the Charity’s operating model and structure are also planned this year.

In line with the above work, recruitment for Trustees will continue in 2023 with a review of Governance structures and arrangements planned for later in the year. This will include, but is not limited to, a Trustee whose focus will be property and another to oversee the area of finance.

FINANCIAL REVIEW

The Charity’s work is entirely reliant on income and investment returns from its endowment fund which is, predominantly, invested in residential properties in Bath.

The Charity sustained an unrestricted fund loss of £22,068 (2021: £143,574 surplus) in the year, before the transfer funds amounting to £167,998 to the endowment fund to clear a historic inter-fund balance. This loss has arisen follow a downward revaluation of £306,300 in relation to the office property held by the Charity within its fixed assets. Before accounting for this revaluation adjustment, a surplus of £284,232 had been achieved by the Charity on its ‘ordinary activities’ and the Trustees are content with this result as it exceed the budgeted surplus anticipated at the start of the year.

The unrestricted funds brought forward at the start of the year were £841,927 (2021: £698,353) and the deficit of £190,066 (2021: £143,574 surplus) for the year was deducted from this figure giving a total unrestricted fund value of £651,861 (2021: £841,927) carried forward at the year end.

The endowment funds brought forward at the start of the year were £40,375,510 (2021: £39,398,966). During the year the endowment fund made a deficit of £3,451,235, (2021: £976,544 surplus). The deficit sustained this year arose as a result of the fall in the value stock market investments and, more significantly, the fall in investment properties held by the endowment fund following a whole property portfolio valuation performed by CSquared of 82 Walcot Street, Bath. More information relating to this valuation can be found in note 4 of these accounts. This deficit was deducted from the brought forward funds to give a total endowment fund of £36,924,275 (2021: £40,375,510) carried forward at the year end.

The total reserves carried forward at the year-end amounted to £37,576,136 (2021: £41,217,437).

INVESTMENT POLICY AND PERFORMANCE

The investment powers of the Board are governed by the Trust Deed, as amended by relevant legislation. The Charity holds a small stock market investment portfolio, and the Board seeks to obtain, through its investment manager, a balance in income return and capital growth from the Charity’s quoted stocks and shares. During the year the stock portfolio was managed by Cazenove.

In light of benchmark indicators, the Board is satisfied with the performance of the stock portfolio during the year which resulted

Mr Willats’ Charity TRUSTEES’ REPORT ( continued ) for the year ended 31 December 2022

in the portfolio achieving realised and unrealised losses of £56,687 (2021: gain of £36,889). Dividend income was in line with expectations. See note 5 for more details.

The majority of the Charity’s investment assets are held as freehold property. In previous years, one fifth of this property portfolio was professionally revalued on an annual basis and the property values carried forward would then be adjusted, as necessary, to reflect these valuations. These valuations were undertaken by Carter Jonas, the last of which was at the end of December 2017. The Board then agreed that a full professional revaluation of all the properties would only need to be undertaken every 5 years and the value of the property would be adjusted, as necessary, following this revaluation. As such, a full, revaluation of the properties was carried out in July 2023. This was conducted by CSquared, Bath in accordance with RICS Valuation – Global Standards, effective 31 January 2022.

INVESTMENT POLICY AND PERFORMANCE (continued)

As a result of this revaluation, the value of the property investments held by the Charity fell by £3,557,500. At the year end, the value of investment properties held by the Charity were £36,353,500 and the Board are satisfied that this represents a true reflection of the current market value of its property investment portfolio at the year end. The Board are confident that freehold property values will continue to rise in the long-term future and, therefore, continue to be a worthwhile investment for the Charity. The Board continues to seek to maintain and improve the Charity’s property portfolio through a planned program of repair and refurbishment to ensure that it maximises the income potential of the assets held.

RESERVES POLICY

The Trustees have agreed that they will aim to maintain free unrestricted funds at a level that equates to approximately three months of its expenditure. This decision was reached on the basis that this level of reserves will provide sufficient funds for the Charity to meet its obligations to staff, contractors and beneficiaries at any given point in time. The Trustees consider that this level of free reserves is sufficient given the regular and reliable income receivable from the rental of let properties.

Based on the expenditure in 2022, costs for three months amount to approximately £262k. As previously stated, the balance held in unrestricted funds at the end of the year is £651,861 and the fixed assets held by unrestricted funds are £169,446 (see note 11), therefore, the Charity holds free reserves of £482,415 which exceeds the target set out in its reserves policy. However, the Board is comfortable holding excess funds in the unrestricted reserves of the Charity as they are aware that some of the property maintenance planned for previous years is still outstanding and, as a result, the expenditure in future years may exceed income and this financing will be met by a draw down against the brought forward reserves.

Previously there was an inter-fund loan account between the unrestricted and endowment funds (see note 10 for further details) which arose in prior years when the Charity used unrestricted funds to finance capital improvements to the property investment portfolio which, had the funds been transferred from the unrestricted funds to the endowment funds, would have taken the unrestricted funds of the Charity below an acceptable level. As the free reserves of the Charity have increased sufficiently, the Trustees considered that they were be able to process the transfer of funds amounting to £167,998 from the unrestricted funds to the endowment funds to clear the inter-fund loan at the end of 2022.

PUBLIC BENEFIT

The Trustees are aware of the provisions of the Charities Act 2011 concerning public benefit, the guidance published by the Charity Commission on this subject and the obligation to report on ways in which they believe Mr Willats’ Charity meets the public benefit requirements established by the Act. Fuller details of the Charity’s objectives and activities undertaken in support of these objectives will be found in other sections of this report. The Board believes that the Charity’s grant distributions and associated activities benefit society through the funding of costs relating to Guides who, in order to comply to the grant criteria, must meet a specified amount of direct contact time with those the Charity seeks to benefit who are the ‘lowest and poorest members of society’. In more modern parlance, this means that Guides work in the most deprived areas of the UK, supporting underserved communities. The Charity uses the Index of Multiple Deprivation (IMD) as part of its criteria for awarding grants to Guides. Through their work, the Guides are not only preaching the Gospel but also providing support and assistance to those most in need.

Mr Willats’ Charity TRUSTEES’ REPORT ( continued ) for the year ended 31 December 2022

GRANT MAKING POLICY

Whilst the expectation of the Charity is that the predominance of the Guide’s work must be with their ‘client group’, the Board recognises that today the duties of a lay worker in an organisation will often include some administrative work. The Board expects, however, that if appointed as a Guide, this aspect of their work must be minimal.

All grants are awarded subject to finances permitting and the Board reserves the right to withdraw a grant at any time without notice. All new grants are awarded for a maximum period of three years. At the expiry of the three years, the organisation who has sponsored the application may not make a further application in respect of the same person, within 12 months of the previous grant expiring.

All grants are reviewed by the Board twice a year to monitor whether each Guide continues to fulfil the requirements of the Charity. Applications for grants will only be considered by the Directors if they are in receipt of correctly completed application forms.

There has been a continued emphasis on making grants to organisations (who are registered charities) who minister to the “ lowest and poorest members of society ”. The Board continues to keep under review the Charity’s grant making activities and, in this regard, see additional comments made by the Board under the heading ‘Future Plans’.

GOVERNANCE

The Board has identified the need to appoint additional Directors to broaden the skills and expertise present on the Board. This process is already underway and will continue into 2023 with a view to appointing at least two new Trustees.

The Trustees, having regard to the Charity Governance Code and in particular Principle 6 of the Code (Equality, Diversity & Inclusion), also intend to look at how they can enhance their approach to supporting this Principle in its own practice and governance. This will be a key consideration in the appointment of new Directors.

DIRECTORS’ INDUCTION AND TRAINING

New Directors undergo an induction scheme to brief them on all the work of the Charity and their legal obligations under both charity and company law. Directors are encouraged to attend appropriate external training events where these facilitate the undertaking of their role. In addition, Directors are kept up to date with charity related matters through the forwarding of regular relevant publications, reports and advice from the Charity’s staff and professional contractors.

Mr Willats’ Charity TRUSTEES’ REPORT ( continued ) for the year ended 31 December 2022

RISK MANAGEMENT

The Board considers that the principal risks faced by the Charity relate to its obligations to its tenants and to carrying out the aims of its Founder. The Board will review its risk register and related policies annually, reflecting any statutory updates and mitigating actions in line with best practice.

Principal Risks

Principal Risks
Risk	Mitigating Actions
Organisational Change	With a number of key staff changes during the year the Trustees have focused on stability and quality of services by close monitoring of Operations
Economic Environment	With the rising cost of living the work of the Charity has been focused on areas of significant deprivation. Additional support has been provided to Guides
Health and Safety of Tenants	The Charity employs the services of professional surveyors and advisors to ensure that the Charity is compliant with all relevant legislation and that the property portfolio is maintained to a high standard

The Charity’s surveyors, the Charity’s Property Manager and the Board meet regularly to discuss the property portfolio, review issues arising and agree action plans. The Charity’s staff and contractors seek to ensure that the Charity is compliant with all relevant landlord legislation.

PAY POLICY FOR KEY MANAGEMENT STAFF

The Directors consider that the Board, the operation lead (replacement for the Clerk), the Interim Director (post year-end), the Property Manager and the Grants Administrator are the Key Management Personnel of the Charity in charge of directing and controlling, running and operating the Charity on a day-to-day basis. Supplementary professional support is provided when required by contractors. The Directors give their time freely and no Director received remuneration in the year.

The pay for the Clerk (up until 8 September 2022), Property Manager and Grants Administrator are reviewed by the Board annually. The salaries of the employees may be increased in accordance with average salary increases nationally and those within the charity sector.

RELATED PARTIES

None of the Directors receive remuneration from their work with the Charity. The Charity does repay expenses incurred by the Directors during the fulfilment of their role as Directors. In addition, the Charity provides some Directors with iPads or laptops to enable the Directors to access the shared server. The Board reviewed its administrative costs in 2022 and ceased its use of online portals Director Point and Wizehive, the latter being used for grant administration. Further details connected to transactions with related parties can be found in note 12.

Mr Willats’ Charity STATEMENT OF THE CORPORATE TRUSTEE’S RESPONSIBILITIES

The Board is 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).

The law applicable to charities in England and Wales requires the Board to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Charity and of the incoming resources and application of resources of the Charity for that period. In preparing these financial statements, the Board is required to:

select suitable accounting policies and then apply them consistently;
observe the methods and principles in the Charities SORP;
make judgments and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements, and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.

The Board are responsible for keeping sufficient accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the applicable Charity (Accounts and Reports) Regulations and the provisions of the Trust Deed. It is also responsible for safeguarding the assets of the Charity and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board is responsible for the maintenance and integrity of the Charity and financial information included on the Charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Approved by the Board on 18th October 2023

Signed by order of the Board:

Roger Driver

Rev’d R Driver Trustee

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MR WILLATS’ CHARITY

OPINION

We have audited the financial statements of Mr Willats’ Charity for the year ended 31 December 2022 which comprise Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the Charity’s affairs as at 31 December 2022 and of its incoming resources and application of resources for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Charities Act 2011.

BASIS OF OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

CONCLUSIONS RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

OTHER INFORMATION

The Trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.

We have nothing to report in this regard.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MR WILLATS’ CHARITY (CONTINUED)

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

the information given in the Trustees’ Annual Report is inconsistent in any material respect with the financial statements; or
the charity has not kept sufficient accounting records; or
the financial statements are not in agreement with the accounting records and returns; or
we have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF THE TRUSTEES

As explained more fully in the Trustees’ Responsibilities Statement set out on page 8, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the Charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITY FOR THE AUDIT OF THE FINANCIAL STATEMENTS

We have been appointed as auditors under the Charities Act 2011 and report in accordance with regulations made under that Act.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the charity’s financial statements to material misstatement and how fraud might occur, including through discussions with the trustees, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the charity by discussions with trustees and updating our understanding of the sector in which the charity operates.

Laws and regulations of direct significance in the context of the Charity include the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and guidance issued by the Charity Commission for England and Wales.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MR WILLATS’ CHARITY (CONTINUED)

AUDITOR’S RESPONSIBILITY FOR THE AUDIT OF THE FINANCIAL STATEMENTS (continued)

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the charity’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the charity’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Charity’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 to the Trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity and the Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Michael Strong

Michael Strong (Senior Statutory Auditor) For and on behalf of Saffery LLP

Chartered Accountants and Statutory Auditors St Catherine’s Court Berkeley Place Bristol BS8 1BQ

Date: 24[th] October 2023

Saffery LLP is eligible to act as an auditor under the terms of Section 1212 of the Companies Act 2006.

Mr Willats’ Charity STATEMENT OF FINANCIAL ACTIVITIES for the year ended 31 December 2022

Note Unrestricted Funds £ Endowment Funds £ Income and endowments from: Investment property income 1,322,006 - Other investment income 8,598 - _ _ Total income 1,330,604 - _ _ Expenditure on: Cost of raising funds: Let property expenditure 2 712,024 - Investment management fees 2 - 5,046 Expenditure on charitable activities: Grants for parish Guides 1,2 334,348 - _ _ Total expenditure 2 1,046,372 5,046 _ _ Unrealised gains on revaluation of fixed assets 3 (306,300) - Unrealised gains on revaluation of investment properties 4 - (3,557,500) Net gains/(losses) on stock market investments 5 - (56,687) _ _ Net income/(loss) on ordinary activities before transfers (22,068) (3,619,233) Transfer of funds 10 (167,998) 167,998 _ _ Net income/(loss) on ordinary activities (190,066) (3,451,235) Reconciliation of funds Funds brought forward 841,927 40,375,510 _ ___ Funds carried forward 11 651,861 36,924,275	Total 2022 £ 1,322,006 8,598 _ 1,330,604 _ 712,024 5,046 334,348 _ 1,051,418 _ (306,300) (3,557,500) (56,687) _ (3,641,301) - _ (3,641,301) 41,217,437 ___ 37,576,136	Total 2021 £ 1,271,403 6,009 _ 1,277,412 _ 736,299 5,345 396,839 _ 1,138,483 _ (1,400) 945,700 36,889 _ 1,120,118 - _ 1,120,118 40,097,319 ___ 41,217,437

The Charity has no recognised gains or losses other than the results for the year as set out above. All of the activities of the Charity are classed as continuing.

See note 14 for fund accounting comparative figures.

The notes on pages 15 to 29 form part of these financial statements.

Mr Willats’ Charity BALANCE SHEET as at 31 December 2022

Notes Fixed assets Tangible assets 3 Freehold investment property 4 Other investments 5 Current assets Debtors 6 Cash at bank Creditors: amounts falling due within one year 7 Net current assets Creditors: amounts falling due after more than one year 8 Total net assets Funds: Endowment funds Unrestricted funds 11	2022 £ 169,446 36,353,500 570,775 _ 37,093,721 _ 121,973 1,209,657 _ 1,331,630 (703,256) _ 628,374 (145,959) _ 37,576,136 _ 36,924,275 651,861 ___ 37,576,136	2021 £ 975,888 39,429,700 632,508 _ 41,038,096 _ 106,567 920,522 _ 1,027,089 (596,415) __ 430,674 (251,333) _ 41,217,437 _ 40,375,510 841,927 ___ 41,217,437

The notes on pages 15 to 29 form part of these financial statements.

The financial statements on pages 12 to 29 were approved and authorised for issue by the Board of Trustees on 18[th] October 2023 and signed on its behalf by:

Roger Driver

Rev’d R Driver Trustee

Mr Willats’ Charity CASH FLOW as at 31 December 2022

		2022	2021
	Notes	£	£
Net cash inflow from operating activities	15	281,759	221,855
Cash flows from investing activities:
Investment income received		8,597	6,009
Cash flows from financing activities:
Expenditure on tangible fixed assets	3	(4,214)	(1,709)
Loss on disposal of fixed assets	3	2,993	-
		--------------------------------------------	-----------------------------------------------
Change in cash and cash equivalents in the year		289,135	226,155
Cash and cash equivalents brought forward		920,522	694,367
		--------------------------------------------	----------------------------------------------
Cash and cash equivalents carried forward		1,209,657	920,522
		==============================================	===============================================

The notes on pages 15 to 29 form part of these financial statements

Mr Willats’ Charity ACCOUNTING POLICIES for the year ended 31 December 2022

Basis of accounting

The financial statements have been prepared under the historical cost convention as modified for investment assets (see below) and in accordance with the Charities Act 2011, the Financial Reporting Standard 102 (FRS102) and the requirements of the Charities Statement of Recommended Practice (FRS102) based thereon.

The accounts have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant notes to these accounts.

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

The Charity is a public benefit entity as defined under FRS102. There are no material uncertainties affecting the ability of the Charity to continue as a going concern.

Fund structure

The Charity has a permanent endowment that was established by Mr Willats when he created the Charity through the gifting of a significant number of properties to the Charity. The endowment funds are invested in perpetuity and the majority of those funds remain invested in properties that formed part of the original portfolio gifted by Mr Willats. The income arising on the endowment fund can be used for the general activities of the Charity and are, therefore, unrestricted funds.

Unrestricted income funds comprise those funds which the Charity is free to use for any purpose in furtherance of its charitable objects.

Income

All income is recognised once the Charity has entitlement to the income, there is sufficient certainty of receipt and so it is probable that the income will be received, and the amount of the income receivable can be measured reliably.

Rental income is recognised in the month that it falls due. Unpaid rent is accounted for in debtors and any rents received in advance are accounted for as deferred income.

Dividend income is recognised when it has been received by the Charity’s fund manager.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the Charity to that expenditure, it is probable that settlement will be required and the amount of the obligation can be measured reliably.

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs relating to the category. All expenses are either apportioned or directly allocated to the applicable expenditure headings. For more information on this allocation refer to ‘allocation of support costs’ within the accounting policies.

Grants for parish Guides are payments made to third parties in the furtherance of the charitable objects of the Charity. The majority of the grants awarded are multi-year grants and these are recognised in full when the commitment is initially made. Although there are certain conditions that could arise which would forfeit a beneficiary’s right to future grants, habitually, most beneficiaries meet all required criteria. For this reason, it was agreed that the Charity would recognise future grant commitments.

Mr Willats’ Charity ACCOUNTING POLICIES ( continued ) for the year ended 31 December 2022

Financial instruments

Debtors and creditors receivable or payable within one year of the reporting date are carried at their transactional price. Debtors and creditors that are receivable or payable in more than one year and not subject to a market rate of interest are measured at the present value of the expected future receipts or payments, discounted at a market rate of interest.

Cash and cash equivalents

Cash and cash equivalents include cash at bank and in hand and short-term deposits with a maturity date of three months or less.

Allocation of support costs

Expenditure categorised as support costs are those costs that are not directly attributable to the applicable expenditure headings. They include the following costs:

Audit and accountancy
Staff costs
Services of the Clerk

All of these costs have been apportioned to the applicable expenditure headings based on an analysis of time spent by the individuals and the professional advisors in relation to those areas of work during the year.

Other costs relating to the running of the office and governance are categorised as administration costs and these are also apportioned to the applicable expenditure headings based on an overall assessment of the total time spent in relation to those areas of work by the key management personnel.

Full details of the allocation of costs can be found in Note 2.

Costs of raising funds

The costs of raising funds consist of let property repairs and maintenance and professional fees in respect of the properties. It also includes investment management fees in respect of the investments held.

Pension costs

The Charity complies with the Government’s requirements in relation to auto-enrolment and contributes to a fund that meets all necessary criteria. During the year the Charity made contributions to this defined contribution money purchase scheme. The assets of the scheme were held separately from those of the Charity in independently administered funds. The pension charge in the accounts represents employer’s contributions payable by the Charity to this pension fund amount to £2,279 (2021: £2,254). There was an outstanding contribution due of £371 (2021: nil) in relation to this pension fund at the year end.

The Charity also made provision to make contributions to a private pension fund of one employee. Although agreed deductions have been taken from the employee’s salary and accruals have been made in relation to the employer’s contribution, the Charity has unable to transfer these funds to the employee’s pension fund as the employee has failed to make the necessary arrangements to enable this to happen. The pension charge within the accounts represents employer’s contributions payable to this pension fund amounted to £1,181 (2021: £2,546). The total of the employee’s and employer’s pension liability in relation to this pension fund amounted to £10,454 (2021: £8,092) at the year end.

Mr Willats’ Charity ACCOUNTING POLICIES ( continued ) for the year ended 31 December 2022

Tangible fixed assets

Freehold property is recorded at market value and regularly revalued for that purpose.

Other fixed assets are initially recorded at cost and written off over their estimated useful life. The depreciation rates applied were as follows:

Office equipment – 20% straight line Furniture and fittings – 20% straight line Website – 25% straight line

Capital purchases in excess of £500 are treated as fixed assets.

Critical accounting judgements and key sources of estimation uncertainty

In preparing financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements. The following judgements and estimates are considered by the Trustees to have most significant effect on amounts recognised in the financial statements:

Investment property valuations
The Charity has a large property portfolio which is held for the purposes of rental income and, as such, is classified as investment properties. The fair value is assessed annually by the Trustees, further details on how the fair value is assessed is noted in note 4 of these accounts, ‘Freehold Investment Properties’.

Freehold property is not depreciated because the Trustees have adopted a revaluation policy in relation to this asset. The property will be professionally revalued every 5 years and the value of the property will be adjusted as necessary following this revaluation. A full professional revaluation of the properties held by the Charity was due at the end of December 2022. This was conducted by CSquared, Bath in accordance with RICS Valuation – Global Standards, effective 31 January 2022. A valuation review will be performed by the Board between professional revaluations. If there is some indication that impairment has occurred, the carrying value of the property would be reduced in accordance with that review. If there is an indication that the property is materially undervalued, an uplift will be recognised in accordance with the review.

Investment assets

Properties:

The Charity’s investment properties are carried forward at market value. In previous years one fifth of this property portfolio was professionally revalued on an annual basis and the property values carried forward would be adjusted, as necessary, to reflect these valuations. These valuations were undertaken by Carter Jonas, the last of which was at the end of December 2017. The Board then agreed that a full professional revaluation of all the properties would only need to be undertaken every 5 years and the value of the property would be adjusted, as necessary, following this revaluation. As such, a full professional revaluation of the properties was conducted as at the in July 2023. This was conducted by CSquared, Bath in accordance with RICS Valuation – Global Standards, effective 31 January 2022. A valuation review will be performed by the Board between professional revaluations. If there is an indication that impairment has occurred, the carrying value of the properties would be reduced in accordance with that review. If there is an indication that the properties are materially undervalued, an uplift will be recognised in accordance with the review.

Any cost of work carried out on modernisation and improvements between valuations is capitalised at cost.

Other investments:

These are shown in the balance sheet at middle market value.

Mr Willats’ Charity ACCOUNTING POLICIES ( continued ) for the year ended 31 December 2022

Realised and unrealised gains and losses

Gains and losses on the sale of property and investments in excess of the brought forward valuation are treated as realised gains or losses and are credited or debited to the Statement of Financial Activities.

Unrealised gains or losses arising on the revaluation of properties and investments are credited or debited to the Statement of Financial Activities.

Mr Willats’ Charity NOTES TO THE ACCOUNTS for the year ended 31 December 2021

1 Grants for parish Guides Total grant commitments made in the year Cost allocation Salary costs: Clerk Salary costs: other staff Audit, Accountancy & valuation fees Administration costs Total costs as stated in the SOFA (see note 2) Reconciliation of grant commitments Commitment brought forward at the start of the year Commitment made in the year: Grants for parish Guides Early end grants written back: Reduction in grants to parish Guides Payments made during the year: Grants for parish Guides Commitments carried forward at the end of the year Split of commitments carried forward: Grants for parish Guides due within one year (see note 7) Grants for parish Guides due in greater than one year (see note 8)	_	2022 £ 250,000 17,552 21,453 9,725 35,618 _ 334,348 __ 497,083 377,500 (126,666) (290,125) _ 457,792 _ 311,833 145,959 _____ 457,792	2021 £ 313,326 29,745 22,168 8,472 23,128 _ 396,839 _ 458,958 349,500 (28,875) (282,500) _ 497,083 _ 245,750 251,333 __ 497,083
	_

All grants were paid to institutions who act as intermediary grant recipients on the basis that the grants paid were to support the employment costs of specific individuals acting as Guides whilst fulfilling their ministry.

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

2 Total expenditure

2022

Salary Salary Audit & Costs: Costs: Accounts Admin Clerk Other Staff Services Costs £ £ £ £ Let property expenditure 17,552 39,841 18,061 66,148 Investment management fees - - - - Grants for parish guides 17,552 21,453 9,725 35,618 (see note 1) __ _ 35,104 61,294 27,786 101,766 _ __ _ 2021 Salary Salary Audit & Costs: Costs: Accounts Admin Clerk Other Staff Services Costs £ £ £ £ Let property expenditure 29,745 41,168 15,734 34,693 Investment management fees - - - - Grants for parish guides 29,745 22,168 8,472 23,128 (see note 1) ___ 59,490 63,336 24,206 57,821	Other Direct Costs £ 570,422 5,046 250,000 __ 825,468 _ Other Direct Costs £ 614,959 5,345 313,326 ___ 933,630	Total £ 712,024 5,046 334,348 __ 1,051,418
		_ Total £ 736,299 5,345 396,839 _ 1,138,483

In analysing the total expenditure by the Charity some costs have been apportioned. The apportionments used are detailed below:

2022 Let property Grants for parish Guides 2021 Let property Grants for parish Guides	Services of Clerk % 50 50 100 50 50 100	Staff Costs % 65 35 100 65 35 100	Audit & Accountancy % 65 35 100 65 35 100	Admin Costs % 65 35
				100
				60 40
				100

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

2 Total expenditure (continued)

All remaining costs are shown under the heading ‘other direct costs’ and are charged directly to the three cost headings as appropriate.

Included within grant expenditure are grants payable of £250,000 (2021: £313,326) relating to individual grants payable to Guides. All grants are given for the same charitable purpose which is to assist parishes in the churches of England, Wales and Ireland by contributing towards the salaries/expenses of lay pastoral workers.

Total governance costs were £51,328 (2021 £34,733). These costs have been split proportionately between let property costs and grants for parish Guides.

Auditor’s remuneration

Included within audit and accountancy services expenditure above, amounts payable to the Charity’s auditor are detailed as follows: audit fees for the current year of £15,236 (2021: £13,794); no other fees (2021: £nil) were paid to the auditors during the year.

3 Tangible fixed assets

2022

Cost At the start of the year Additions Disposals Transfer to investment properties Revaluation As the end of the year Depreciation At the start of the year Charge for the year Write back on disposal As the end of the year Net book value As the end of the year	Freehold Office Furniture & Property Equipment Fittings £ £ £ 942,600 43,537 276,813 - 4,214 - - (3,849) - (481,300) - - (306,300) - - _ _ _________ 155,000 43,902 276,813 _ _ _________ - 36,206 256,593 - 4,217 10,109 - (856) - _ __ ___ - 39,567 266,702 _ _ _________ 155,000 4,335 10,111	Website £ 22,948 - - - - _ 22,948 _______ 17,211 5,737 - _ _ 22,948 _ _ -	Total £ 1,285,898 4,214 (3,849) (481,300) (306,300) _ 498,663 _ 310,010 20,063 (856) __ 329,217 __ 169,446

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

3 Tangible fixed assets (continued)

2021 Cost At the start of the year Additions Revaluations As the end of the year Depreciation At the start of the year Charge for the year As the end of the year Net book value As the end of the year	Freehold Office Furniture & Property Equipment Fittings £ £ £ 944,000 41,828 276,813 - 1,709 - (1,400) - - _ _ _________ 942,600 43,537 276,813 _ _ _________ - 31,695 238,976 - 4,511 17,617 _ __ ___ - 36,206 256,593 _ __ ___ 942,600 7,331 20,220	Website £ 22,948 - - _ 22,948 _______ 11,474 5,737 _ _ 17,211 _ _ 5,737	Total £ 1,285,589 1,709 (1,400) _ 1,285,898 _ 282,145 27,865 __ 310,010 __ 975,888

During the year the Trustees decided to rent out one of their properties that had previously been used by the charity. The brought forward market value of this space had been estimated as £481,300 so this value has been transferred out of the freehold property and added to investment properties within the fixed assets, reducing the total value of office space now being used by the Charity to £461,300, before recognising the revaluation.

The Charity’s investment properties are held at market value. The year-end valuations have been arrived at on the basis of a valuation undertaken by CSquared in July 2023. The valuation was made on an open market basis by reference to market evidence of transaction prices for similar properties, and was carried out in line with the Charity’s 5 year property revaluation policy.

If revalued assets were stated on an historical cost basis rather than a fair value basis, the carrying amounts would have been approximately £395,000 (2021 - £810,000).

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

4 Freehold investment properties

2022

Commercial £ Valuation at the start of the year 3,760,000 Improvements at cost during year - Transfer from tangible fixed assets - Revaluation of property during year 843,500 _ Valuation at the end of the year 4,603,500 __ 2021 Commercial £ Valuation at the start of the year 3,760,000 Improvements at cost during year - Revaluation of property during year - _ Valuation at the end of the year 3,760,000	Residential £ 35,669,700 - 481,300 (4,401,000) _ 31,750,000 _ Residential £ 34,724,000 - 945,700 ___ 35,669,700	Total £ 39,429,700 - 481,300 (3,557,500) _ 36,353,500 Total £ 38,484,000 - 945,700 ___ 39,429,700

During the year the Trustees decided to let one of their properties that had previously been used by the Charity. The brought forward market value of this property had been estimated as £481,300 so this value has been transferred out of the freehold property fixed assets and added to investment properties, reducing the total value of office space now being used by the Charity to £461,300, before recognising the revaluation adjustment.

The Trustees estimate that the market value of the freehold investment properties at 31 December 2022 is £35,669,700 (2021: £39,429,700).

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

5 Other investments

Market value at the start of the year Portfolio fees Net (loss)/gain Market value at the end of the year Historical cost at the end of the year The investments are held as follows: Equities and convertible stocks Gilts and other fixed interest stocks Cash and cash equivalents Analysis by geographical sector Investment assets in the UK Investment assets outside of the UK 6 Debtors Rents receivable Prepayments		2022 £ 632,508 (5,046) (56,687) __ 570,775 __ 494,356 _ 2022 £ 416,248 132,349 22,178 _ 570,775 _ 2022 £ 105,806 464,969 _ 570,775 _ 2022 £ 20,067 101,906 _____ 121,973	_	2021 £ 600,964 (5,345) 36,889 _ 632,508 _ 517,621 _ 2021 £ 393,308 144,642 94,558 _ 632,508 _ 2021 £ 350,409 282,099 _ 632,508 _ 2021 £ 18,028 88,539 _ 106,567
	_
	_
	_		_
	_		_

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

7 Creditors: amounts falling due within one year

Rents invoiced in advance Rents received in advance Trade creditors Accruals Other creditors Grants due to Parish Guides 8 Creditors: amounts falling due after more than one year Grants due to Parish Guides 9 Staff costs Salaries and social security Compensation for loss of office Employer’s NI Pension contributions Average weekly number of employees during the year, calculated on an average headcount basis	_	2022 £ 40,720 7,890 133,618 64,952 144,243 311,833 _ 703,256 __ 2022 £ 145,959 _ 2022 £ 74,290 10,000 3,222 3,657 *91,169* ___ 3	_	2021 £ 39,723 10,040 127,549 29,668 143,685 245,750 _ 596,415 __ 2021 £ 251,333 _ 2021 £ 106,187 - 6,643 4,800 *117,630* ___ 3
	__		__
	__		__

No individual employed by the charity received remuneration in excess of £60,000 during the current or previous year.

The Key Management personnel of the Charity, as previously stated in the Trustees’ Report, comprise of the Directors of the Corporate Trustee, the Clerk (until resignation on 8 September 2022), the Property Manager and the Grants Administrator. The total salary and consultancy remuneration paid by the Charity to the Key Management personnel was £91,169 (2021: £117,630).

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

10 Inter-fund loan

The Charity holds significant endowment funds, the majority of which are invested in property. The Trustees believe that in order to safeguard the asset value and future income streams of the property portfolio it is necessary to maintain and improve the endowment properties. All endowment property improvements are added to the brought forward value of the property portfolio. The endowment funds do not receive any income and, therefore, only hold cash reserves if endowment assets have been sold, as such, the endowment fund does not usually hold sufficient cash reserves to finance the necessary property improvements. Historically, where the endowment funds have not been able to finance the full cost of property improvements, the shortfall is met by a fund transfer from the unrestricted funds. This has the immediate effect of reducing the unrestricted funds’ reserves but the Trustees believe that the preservation of the property portfolio has resulted in higher future income generation for that fund.

In 2019 the total value of improvements to the property portfolio was £481,135. These costs were partly financed through the unspent cash reserves held by the endowment fund at the start of the year following a £400,000 draw down from the stock market portfolio in 2018. The unspent cash reserves brought forward from the previous year amounted to £246,137. The balance of costs, being £234,998 was financed from cash held within the unrestricted funds. The Trustees considered that due to insufficient free reserves within the unrestricted fund, the Charity was not in a position to transfer funds from unrestricted funds to endowment funds. Instead, it was agreed that the unrestricted funds would lend the cash shortfall to the endowment funds until such time as the endowment fund was in a position to repay the loan or the unrestricted funds were in a position to write off the loan.

No improvements have been made to any of the properties held by the endowment funds during the year so there has been no need to increase the amount lent from the unrestricted funds to the endowment funds and none of the assets held by the endowment fund have been realised in the year, so the endowment fund has not been able to repay this loan during the year. However, in 2020 the Trustees performed a desk top revaluation of the Charity’s investment portfolio which included one property that is held by both the endowment and unrestricted fund. The entire value of this property’s gain was incorrectly attributed to the endowment fund but £67,000 of the gain should have been attributed to the unrestricted funds. To correct this error, the Trustees have decided that this gain should be written back against the inter-fund loan. Therefore, the balance of the inter-fund loan has reduced from £234,998 at the start of 2021 to £167,998 at the end of that year. The remaining balance of £167,998 was settled at the end of 2022 by a transfer from the unrestricted funds to the endowment funds.

The movements relating to the inter-fund loan are detailed below:

2022 £ Balance brought forward at the start of the year 167,998 Adjustment for unrealised gain on property revaluation previously incorrectly attributed to the endowment fund in prior year - Transfer of unrestricted funds to endowment funds to clear loan (167,998) ______ -	2021 £ 234,998 (67,000) - ______ 167,998

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

11 Analysis of net assets between funds

2022

Endowment funds Unrestricted funds 2021 Endowment funds Unrestricted funds	Freehold Investment Property £ Other Investments £ 36,353,500 570,775 - - _ _ 36,353,500 570,775 _ _ Freehold Investment Property £ Other Investments £ 39,429,700 632,508 - - ___ _ 39,429,700 632,508	Fixed Assets £ Inter-fund Loan £ Net Assets/ (Liabilities) £ Total £ - - - 36,924,275 169,446 - 482,415 651,861 _ _ _ _ 169,446 - 482,415 37,576,136 _ _ _ _ Fixed Assets £ Inter-fund Loan £ Net Assets/ (Liabilities) £ Total £ 481,300 (167,998) - 40,375,510 494,588 167,998 179,341 841,927 _ _ _ __ 975,888 - 179,341 41,217,437

12 Related party transactions and Directors’ expenses and remuneration

No related party transactions were entered into during the current or previous year.

During the year, no Director received any remuneration (2021: £nil) but expenses amounting to £760 (2021: £194) were claimed by a total of two Directors in relation to travel and accommodation costs.

13 Capital commitments

At both this year end and the previous year end, the Charity had made no commitment to any future capital expenditure.

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

14 Fund accounting comparative figures

2021

Unrestricted Funds £ Income and endowments from: Investment property income 1,271,403 Other investment income 6,009 _ Total income 1,277,412 _ Expenditure on: Cost of raising funds: Let property expenditure 736,299 Investment management fees - Expenditure on charitable activities: Grants for parish Guides 396,839 _ Total expenditure 1,133,138 _ Unrealised gains on revaluation of fixed assets (700) Unrealised gains on revaluation of investment properties - Net gains on stock market investments - _ Net income on ordinary activities 143,574 Reconciliation of funds Funds brought forward 698,353 _ Funds carried forward 841,927	Endowment Funds £ - - _ - _ - 5,345 - _ 5,345 _ (700) 945,700 36,889 _ 976,544 39,398,966 __ 40,375,510	Total 2021 £ 1,271,403 6,009 _ 1,277,412 _ 736,299 5,345 396,839 _ 1,138,483 _ (1,400) 945,700 36,889 _ 1,120,118 40,097,319 __ 41,217,437

Mr Willats’ Charity NOTES TO THE ACCOUNTS (continued) for the year ended 31 December 2022

15 Reconciliation of net movements in funds to net cash generated from operating activities

	2022	2021
	£	£
Continuing activities
Net movement in funds	(3,641,301)	1,120,118
Deduct investment income	(8,597)	(6,009)
Add back depreciation of tangible fixed assets	20,063	27,865
Add losses/(deduct gains) on investments	56,687	(36,889)
Add back investment management fees	5,046	5,345
Deduct increase in debtors	(15,406)	(9,856)
(Decrease)/increase in creditors	1,467	65,581
Unrealised loss/(gain) on revaluations of investment properties	3,557,500	(945,700)
Unrealised loss/(gain) on revaluation of property held in fixed assets	306,300	1,400
	---------------------------------------	---------------------------------------
Net cash inflow from operating activities	281,759 ========================================	221,855 ===========================================