2020-12-31-accounts

Registered Social Landlord number: A1070 Registered Charity number: 206984

Report of the Trustees and Audited Financial Statements For the Year Ended 31 December 2020 For

TIVERTON ALMSHOUSE TRUST

TIVERTON ALMSHOUSE TRUST

Contents of the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2020

	Page
Report of the Corporate Trustee	1-14
Statement on internal control systems	15
Corporate Trustees’ responsibilities statement	16
Independent Auditor’s report	17-19
Statement of comprehensive income (including income and expenditure account)	20
Statement of financial position	21
Statement of changes in equity and reserves	22
Statement of cash flows	23
Notes to the financial statements	24-34

REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

The Corporate Trustee presents this report with the financial statements of the charity for the year ended 31 December 2020.

INTRODUCTION

The Corporate Trustee is pleased to report that the agreed objectives central to the work of the Tiverton Almshouse Trust of maintaining and improving core charitable activities, planning for the future and delivering a healthy financial position have been satisfied.

Tiverton Almshouse Trust is regulated by the Charity Commission and the Regulator of Social Housing (formerly the Homes & Communities Agency).

This report includes references to the Financial Statements attached and aims to address the regulatory requirements of the Regulator of Social Housing three economic standards: Value for Money, Governance & Financial Viability and the Rent Standard, throughout, as part of the reporting structure.

The total income this year in 2020 from charitable activities and other income was £813,932 (2019: £969,196). The total expenditure was £799,382 (2019: £816,395). The gain on investments was £102,087, which includes an unrealised gain of £106,414 and a realised loss of £4,327. During the year a gain on revaluation of investment properties of £80,000 was recognised. The surplus for the year is £196,637.

CODE OF GOVERNANCE

The Charities Code of Governance 2017 has been adopted by the Board in line with Charity Commission guidance. The corporate trustee has also reviewed the changes made to the code in December 20202 and they will continue to apply this c ode going forward. Tiverton Almshouse Trust falls between the Code for smaller and larger charities (defined as turnover below and above £1m respectively). The Board aspires to meet the recommendations set out for larger charities whilst maintaining a level of proportionality. The Code is produced by the NCVO, ICSA, ACEVO, Association of Chairs and the Small Charities Coalition with the oversight of The Charity Commission

1.

OBJECTIVES AND ACTIVITIES

The objects of the Tiverton Almshouse Trust in the Scheme made by the Charity Commission dated 10 September 2009 (as amended by the Scheme dated 28 July 2014) are:

• a. the provision of housing accommodation for poor persons not less than 60 years old who have lived in the area of benefit for not less than 2 years prior to the appointment.

• b. such charitable purposes for the benefit of the residents as the Corporate Trustee decides

• c. the relief of persons resident in the area of benefit who are in financial hardship by:

• i. making grants of money to them; or

• ii. providing or paying for goods, services or facilities for them; or

• iii. making grants to other organisations or institutions which provide goods, services or facilities for those in financial hardship.

The use of income and capital must firstly be applied to meet the proper costs of administering the charity and managing its assets (including repair and insurance of its buildings) and to make annual payments into the reserve funds considered necessary in the annual budget.

The remaining income to further the objects of the charity are made in the following order of priority:

• a. the benefit of the residents

• b. the relief of financial hardship of persons living in the area of benefit (which is Tiverton and environs).

The greatest activity within the Trust is the maintenance of its properties. In addition to almshouse accommodation, the Trust also owns investment property in Tiverton.

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

The board considers that the objects are still relevant to the work of the charity. The popularity of the almshouse accommodation, the low level of voids and the financial security of the organisation means that it achieves, and can sustain, its objectives. Plans for the future address how those objectives can be taken forward to enable beneficiaries to continue to benefit from the Trust’s charitable activities as the government and society shifts to take care of a higher proportion of an ageing and frail older population.

Public Benefit

In carrying out the Trust’s aims and objectives and in measuring achievements and performance, the Corporate Trustee has had regard to the Charity Commission’s guidance dated February 2014 entitled “Public Benefit: rules for charities”. Given that the Trust’s objective is the relief of poverty (see objects above) only the benefit aspect of “public benefit” requires satisfying. The Commission specifies that the purpose of the charity must be beneficial in a way that is identifiable and capable of being proved by evidence where necessary and not based on personal views. Perhaps the most quantifiable measure to identify whether the charity has a benefit to the local population eligible for accommodation is the low level of voids within the almshouses. COVID-19 restrictions and lockdowns were the cause of a small number of voids in 2020 as work could not be completed during these periods to empty almshouses to get them ready for new residents. In effect, the Trust had no voids that were not directly attributable to the pandemic.

In line with the Trust’s governing scheme 2009, the charity provides housing for local people over 60 years old and in financial need. Through regular advertising, open days, contact with Mid Devon District Council, and local voluntary agencies such as Age UK and local charities such as the Churches Housing Action Trust (CHAT) the Trust reaches a wide audience. Eligible applicants waiting for accommodation are numerous and from a wide variety of backgrounds indicating that the Trust is reaching its beneficiary group. Nevertheless, The Corporate Trustee strives to raise the profile of the Trust within the town still further and the Annual Plan has specific targets for ensuring wider awareness which were met during the year. The rigorous application of a points system ensures each applicant meets the required criteria, enables each applicant to be prioritised primarily based on financial need. The applicant in greatest need at the time a vacancy arises is offered the accommodation regardless of how long they have been known on the list.

Tiverton Almshouse Trust almshouse properties are usually fully occupied with no voids (a void is defined as an empty flat awaiting allocation with no further redecorating or refurbishment required before it is occupied). The National Almshouse Association considers a 5% minimum void rate is acceptable and a void allowance of up to 12.5% may be suitable for small groups of almshouses, given the specific beneficiary group they serve. That would indicate that 4 to 9 of the Trust’s properties could be void at any one time.

During 2020 eleven vacancies arose (nine in 2019). Three properties were void for on average 2 months as a direct impact of the COVID-19 pandemic and the UK Government restrictions placed upon us all. This led to the Trust not being able to secure contractors to undertake these works during the initial lockdown period from March to June 2020. Once there was a gradual easing of lockdown restrictions, contractors were in high demand, yet we were able to carry out significant refurbishment, including replacing kitchens and bathrooms with these larger projects taking on average four-five weeks to complete. Despite the impact of the pandemic, the Trust was able to secure new residents immediately as it maintains a detailed application list of eligible local people in need who had been previously interviewed so that they could be offered vacant almshouses. In some cases, in flats where minimal work was needed, the turnaround in the flat getting it ready for the new resident was just one week.

Properties

In total there are 83 almshouses, and three units are occupied by two Resident Wardens and the House Manager. One almshouse for a resident warden was extended in 2019 to accommodate her young family leaving the Trust with 82 almshouse. However, as the post holder has now changed this extra space was no longer needed and has been converted back to the original almshouse. They are provided on three geographically separate sites within Tiverton, namely:

• (i) Greenway Gardens, King Street

• (ii) Slees, Angel Terrace

• (iii) John Greenway Close, Gold Street

The accommodation is designed for independent living, as residents get older, the Trust continues to support them for as long as possible and some residents receive third party care packages, social/community services assistance and support from the mental health team as required.

Tiverton Almshouse Trust owns the freehold of a number of commercial properties in the centre of Tiverton comprising retail and residential flats as well as two office buildings known as Raymond Penny House and John Greenway Building in the centre of town. The Trust also owns two terraced houses in Westexe, Tiverton.

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

Going Concern

After a detailed review and examining major areas which could give rise to significant financial risk, the directors are satisfied that no material exposures exist other than as reflected in these Financial Statements and the Trust has adequate resources to continue its operations for the foreseeable future. The directors and management team review quarterly budgets with our external accountant, which include a minimum forecast 12-month period as well as a programme of works for 5 years. Cash liquidity is monitored through our updated summaries of cash and investments which the board review in detail at Property & Finance meetings 5 times a year and at the board meeting 4 times a year. We have also engaged an independent financial advisor from Stafford House Investments, Andrew Mayne, to produce an annual report to review all our investments in terms of risk. Tiverton Almshouse Trust is not dependent on investment income and market performance. We receive a steady income from commercial rents and weekly maintenance contributions from our almshouse residents, which meets our annual running costs. Large one-off projects regarding property development and/or significant repairs are reviewed against cash liquidity and available funds, which do not form part of the trusts permanent endowed fund. Five-year quinquennial inspections are carried out by Assinder Turnham on all our properties on a rolling programme, so we can plan for large expenditure required over coming years and factor into our budget.

The World Health Organisation (WHO) classed COVID-19 as a pandemic on 11 March 2020. Following that announcement, the Government in the UK introduced various measures to address the impact in the UK resulting in lockdown from 23 March 2020. Our sympathies continue to be with all those affected in any way by the virus. The UK continues to evolve in response to the challenges of COVID-19 and we continue to take proactive steps to ensure that we are well-positioned to respond.

The Trust took proactive measures as soon as the pandemic was announced. We introduced a new cloudbased IT system, that enabled all files to be accessed remotely by staff and directors through a secure portal. In order to ensure robust governance and to ensure board meetings could go ahead, staff and directors were supported to use remote video calling for meetings as social distancing prevented face to face meetings. The Trust reviewed its risk register regularly and introduced a new crisis policy was put in place so that all staff and directors were aware of the steps we were taking to respond to the pandemic and to keep the Trust running effectively, efficiently and safely. We also reviewed our budgets to assess our assumptions, look at any loss of income and to look at any potential risks or impact if for example, commercial units undergoing refurbishment were delayed in being leased.

Our office was closed to visitors and staff were supported with new computer equipment to be able to work remotely where necessary. We risk assessed our offices and housing sites, increased cleaning regimes, bought additional PPE for staff, sanitisers units for across the sites, closed our guest rooms and ceased our social events for residents.

Some works to residential flats and retail units being refurbished were delayed due to contractors having to stop work due to the lockdown and also delays in securing materials, this delayed us being able to move new tenants in by several months and therefore there was a loss of income that could have been achieved.

We contacted all our commercial tenants to find out the financial impact on their businesses throughout the lockdown, particularly those forced to close temporarily. We agreed flexible payment plans for those who were in immediate financial hardship and signposted all to government schemes for financial help which some were able to access throughout 2020. We reviewed our investments with our fund manager and took advice about the volatility of the investment market as there were some losses at the start of the pandemic which have been improving throughout the year for some of our investments.

Covid has impacted the year by some increased costs for staffing where staff were asked to work some additional hours to ensure the Trust was able to run smoothly, additional costs for equipment, cleaning and PPE resources, delays due to lockdown leading to a loss of some income for some vacant almshouses, residential and retail units that were in the middle of refurbishment work. The Trust has calculated additional costs for cleaning, equipment, PPE to be £6,780. At the end of the year all almshouses and retail units were full and all commercial tenants had paid their rents up to date.

Maintaining Properties

The Charity Commission Scheme clearly states that the main object of the charity is to provide almshouses for a specified group of local people. Income and capital must first be used to meet the proper costs of administering the charity and repairing, maintaining and insuring the buildings.

1. ACHIEVEMENTS AND PERFORMANCE

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

Total expenditure (operating costs) decreased by £17,013 to 799,382 in 2020. 2019 included essential upgrade works to the residents’ Tunstall Emergency Call System primarily, which formed part of the utilities cost. Note 4 to the Financial Statements provides a comparison and more detail is provided below. In 2020, and in line with the quinquennial surveys, the Trust undertook a budgeted programme of works and cyclical maintenance.

All significant contracts for programmed works and significant repair works are put out to tender. The specification and contract administration (including tender administration and reporting) has been undertaken this year by Assinder Turnham, Chartered Surveyors. Minor routine maintenance is undertaken either by the Trust’s handyman or by one of an approved number of sub-contractors. Quotes are not required for work anticipated to be less than £3,000 to avoid inefficiency and wasted staff time and sub-contractor time. Subcontractors are required to breakdown labour and parts entries on invoices and, where possible, discounts for regular work are requested and often granted. All invoices are reviewed three times – by the Finance Administrator, Property Manager, and finally the Chief Executive before being approved by directors. At the end of the year all almshouse properties were occupied and all residential and commercial properties were occupied, apart from one retail unit, which was then leased in January 2021.

Maintenance of Almshouse Properties

Of the £799,382 total operating costs and interest payable in 2020 for all properties (investment properties and almshouses combined) £228,879 was spent on almshouse maintenance by way of programmed works, general redecoration and, where necessary redecoration and refurbishment of the eleven flats that became vacant. Within the programmed works are two rolling programmes, namely: boiler replacement and kitchen upgrades/bath replacement with showers at John Greenway Close and Greenway Gardens. Boiler replacement costs this year were £75,141 (2019: 25,130), bathroom and kitchen replacements were £80,853 (2019: £69,439).

Increased regulation means increased routine checks, which continue to present additional financial cost and staff time. The two most costly regulatory functions relate to legionella prevention and fire safety. The monthly, six-monthly and annual checks for monitoring water hygiene systems to reduce the risk of legionella cost the Trust £5,949 in 2020 (2019: £8,912). This reduction is a result of undertaking less remedial work than in the previous year.

To check fire detection systems the cost in 2020 was £5,498 (2019 £5,513) Where possible staff carry out routine checks but specialist services are more frequently required to fulfil legal obligations. The requirement to meet more robust guidance and regulations in buildings of differing ages and styles means the Trust is reliant on specialist contractors to carry out some of the works. Quotes are invited for this work and annual contracts awarded.

Residents’ Satisfaction

The Trust is committed to improving services and to understand what are the most important issues and priorities for our residents by gathering their valuable feedback. We carry out an annual residents’ satisfaction survey, results for 2020 are below compared to 2019 results.

Residents Satisfaction Survey	2020	2019
Satisfaction with overall service	95%	98%
Satisfaction with the overall quality of your home	93%	99%
Satisfaction of feeling safe living in your almshouse	100%	98%
Satisfaction that your weekly maintenance contribution provides value for money	94%	99%
Satisfaction that your utility contribution charge provides value for money	95%	99%
Satisfaction with repairs and maintenance	95%	96%
Satisfaction that Tiverton Almshouse Trust listen to your views and acts upon them	95%	84%

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The Trust joined a benchmarking group called Acuity 2018 to compare the annual costs of running the almshouse properties with similar almshouse charities and small housing associations across the country. Our level of residents’ satisfaction scores very favourably with other organisations. We sit just below the median for spend on reactive repairs and just above for cyclical and major repairs. We have invested in a bespoke property management system for the Trust and introduced cloud-based IT systems, which will help going forward in recording more detailed data for benchmarking.

Investment Property Maintenance

Expenditure on day-to-day maintenance on the Trust’s investment properties was significantly less than on almshouse properties, which is to be expected given the tenancy agreements on the former which oblige commercial tenants to keep properties in good and tenantable repair. In 2020 the routine and cyclical maintenance expenditure for the Trust on these properties was £60,173 (2019: £22,248), primarily consisting of servicing and general repairs and including the planned works.

Provision of Almshouse Accommodation

Tiverton Almshouse Trust is a social housing provider registered with, and regulated by, the Regulator of Social Housing (formerly the HCA). The Trust is also a registered charity and therefore regulated by the Charity Commission. The main purpose of the organisation is to provide housing to local people over 60 years of age and in financial need. Applications are encouraged from anyone who believes they fulfil the basic three criteria and are scrutinised in line with an internally approved policy which is regularly reviewed (at least every three years) to ensure consistency and relevance (see below).

Two out of our three sites have a Resident Warden. The third site, known as Slees, is a historic building in the town centre comprising three flats. Residents at Slees are not visited regularly by a Resident Warden but the House Manager will visit as necessary. This is because, in general, residents at Slees need to be mobile due to the restrictive historical layout.

The Resident Warden’s remit is to ensure the daily well-being of all residents and although they are not medically trained and do not provide personal care, they assist residents in day-to-day living. Their role can be described as “being a good neighbour”. There is a 24-hour emergency call system within Greenway Gardens and John Greenway Close enabling residents to access emergency help at all times of the day and night. The Resident Wardens maintain regular contact with family members when necessary and, in particular, when a resident is unwell. Resident Wardens also provide a variety of social activities where residents are invited, but are not obliged, to attend. These are held within the Community Room on the two main sites. With COVID restrictions in 2020, for residents and safety, group events have not been able to be held for the majority of the year.

Every six weeks there is a meeting on each of the main sites attended by appointed Directors of the Pastoral Sub-Committee, the Chief Executive, the House Manager and the Resident Warden to discuss management and resident issues. Directors on this committee are also responsible for interviewing new applicants and allocating vacant almshouses.

Residents pay a Weekly Maintenance Contribution for their accommodation and a contribution to water supply and gas (Utility Contribution). Weekly Maintenance Contributions (WMC) vary from £89 per week to £117 per week depending on the accommodation that is provided. In addition, all residents pay a £23.50 Utility Contribution based on single occupancy and £29.50 per week based on double occupancy. The Corporate Trustee aims to keep resident contributions as low as possible taking into account formulas provided by the Regulator of Social Housing (RSH) and equivalent fair rent assessments from the Valuation Office Agency (VOA). The latest VOA assessment was undertaken in November 2019. WMC was kept to £2 per week increase and there was no increase to the Utility Contributions. In addition, the Chief Executive consults with Mid Devon District Council on any WMC increase to ensure that those residents who require assistance can access 100% of the rent payment through housing benefit if eligible.

The Corporate Trustee strives to ensure a fair, consistent and transparent process when allocating almshouse accommodation. There is an approved policy within the Trust to advertise in the local newspaper, website if necessary, maintain regular contact with local organisations such as Age UK and the Churches Housing Action Trust (CHAT) as well as Devon Home Choice (the bidding portal for local authority housing and housing associations). Adverts are also placed in Mid Devon District Council’s reception. All applicants must complete a comprehensive application form including a financial information section and be interviewed by the appointed Directors and CEO. A points system is in used to ensure consistency. Those applicants placed on the list awaiting allocation are regularly reviewed and applicants are encouraged to keep in touch with the House Manager.

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

A good working relationship with Mid Devon District Council and local housing charities ensures a wide- ranging local awareness of the almshouses as well as staff presentations by Zoom to local groups and articles in local papers. Innovative ways to widen the search for applicants are put in place and once an applicant is accepted in principle a priority weighting system ensures the applicant in greatest need is offered any vacancy first, in accordance with the Scheme.

The continuing lack of care homes within the town and surrounding means that residents are staying in their homes longer than in previous times. Social care support is now provided at home and hospital admissions generally reserved for emergencies, which means that care agencies and health professionals are frequently on site.

Alexandra Lodge

Planning permission was granted in 2015 to The Abbeyfield Society for the redevelopment of Alexandra Lodge, an empty listed house in gardens within the town, for a 45-bed extra-care unit. The freehold of the property is owned by Tiverton Almshouse Trust and, following planning permission, a 250-year lease was signed to The Abbeyfield Society. Since then, progress has been slow and due to financial issues Abbeyfield may not be able to continue with their plans for this site. Tiverton Almshouse Trust are in communications with Abbeyfield to see the options that they are pursuing to ensure the site is able at some point in the future to be developed by another organisation to ultimately benefit the people of Tiverton.

Relief of Financial Hardship

The additional objectives of the charity allow for the relief of poverty for local people who are in financial hardship by making grants of money to them or making grants to other organisations or institutions with similar aims. The amount of money donated to achieve this objective is considered by the Corporate Trustee at the AGM each year and the donation may be approved to a local organisation with similar aims. No donations were made in 2020.

FINANCIAL REVIEW

The Corporate Trustee reviews its reserves and, in particular the non-designated funds and expendable endowment to be used for “the proper costs of administering the charity and of managing its assets” (Charity Commission Scheme September 2009). A Reserves Policy addresses the Expendable Endowment and designates funds to the actions approved in the Five Year Strategy. There are regular reviews of operational risks and requirements, sufficient reserves are maintained in order to address these requirements.

Specifically, funds were set aside to refurbish existing residential and retail investment property in September 2019 and work was undertaken to produce a specification and complete a tender process for a refurbishment of this commercial and residential investment property. This work started in January 2020.

As stated in the Investment Policy, the objective of the Corporate Trustee in holding investments within a share portfolio is to produce the best financial return and capital growth within an acceptable risk and to balance the income and capital return.

The four risks identified in the report last year still stand, namely:

• i. Capital growth not keeping up with inflation thereby leading to a decline in the real value of the investment ii. Fluctuating income from share portfolios and deposit accounts due to COVID-19 pandemic iii. Bank default.

• iv. More topically, the unknown effect of the current Brexit negotiations is noted.

To limit the above risks the board has delegated certain decisions to the Property & Finance Sub-committee (which consists of over half of the board’s number) including allowing those members to re-invest maturing funds subject to the current Financial Services Compensation Scheme Limit. This allows decisions to take advantage of available investment offers (especially fixed rate bonds open for a short time) by acting in a timely manner. All investments, apart from those held within share portfolios, are monitored at every sub- committee meeting.

Shareholding portfolios are managed by professional brokers and/or fund managers and an annual review is undertaken at the November board meeting of the Corporate Trustee. An external investment review takes place annually.

The Corporate Trustee has considered ethical investments in line with ensuring that investments are not made into companies with opposite values from that of the Trust and has therefore put restrictions on investing in any

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

fund that is linked to the production or sale of Tobacco.

It also considered companies who seek to make people homeless, however, this would be difficult to monitor and enforce. It was decided not to impose this ethical restriction. The Corporate Trustee accepts that the ethical values of individual directors must not compromise policy decisions.

The Statement of Comprehensive Income shows that income received from almshouse residents’ weekly contributions (including service charges) has increased by £10,022, primarily as a result of the annual review of charges in April. The Corporate Trustee is mindful of maximising income (for the charity’s future sustainability) commensurate with fulfilling the Charity Scheme objective to ensure no resident suffers financial hardship.

Operating costs (note 4) show some changes from the previous year. 2019 was the first time the Trust analysed costs related to social housing and investment properties and apportioned costs across the two areas. There has been an increase in the contracted management hours, but administrative wages and salary costs decreased in 2020 by £9,150, compared with 2019. Overall wage costs are up by £34,522 compared to 2019.

The income from fixed asset investments (shareholdings and deposits) decreased by £37,748 over the year mainly due to the volatile market caused by the COVID-19 pandemic. The managed portfolio is valued at £1,368,407 (2019: £1,303,606).

The annual total return on the managed portfolio is reflected in Note 12, with unrealised gains of £102,087 (2019: £316,219).

Last year directors decided not to reinvest the income from the managed portfolio but to receive it as dividends and interest. The impact of this decision can be seen in Note 12 where income reinvested has decreased from £63,739 in 2019 to £16,487 in 2020.

Rents receivable from investment properties have increased to £257,271, compared to the 2019 year (£254,903). At the year-end there was just one commercial void. A significant investment was made by the Trust to develop a large commercial property and 4 residential flats situated above, that had been leased by a larger retailer for the last 50 years. We submitted a dilapidation claim to this retailer at the end of their lease for £89,687, however the retailer has now gone into a Company Voluntary Arrangement, so unfortunately the external administrators have deemed that only £2,690 is eligible to be paid to us from this debt within the next 19 months, despite the significant investment the Trust had to make to bring the building and flats back into an acceptable standard for future tenants. £2,690 is included in current assets to reflect the money owed to the Trust.

Professional valuations are undertaken on a five-year rolling programme and this year took place on 2 – 16 Bampton Street, which increased in value by £80,000, from £1,420,000 to £1,500,000.

Informal valuations were undertaken by the corporate trustee in 2020 on the remaining almshouse and investment properties and kept at 2019 levels.

Permanent endowment (identified as investment properties, housing properties and other investments agreed as such by the Charity Commission as part of their investigations prior to the merger in 2009) has increased from £8.52m to £8.53m, reflecting, the unrealised gain on investments.

Other Reserves of £1,505,609 shown in the Statement of Financial Position are identified in note 17 and split into:

1. The Extraordinary Repair Fund (ERF) which allows for unforeseen expenditure necessary to carry out the Trust’s objectives.

2. Programmed Works are based on the five-year budget forecast, the quinquennial surveys and conditions surveys that are carried out for the Trust on a regular basis to ensure that there is a rolling programme of maintenance.

3. The Cyclical Maintenance fund reflects expenditure on work to maintain properties that is undertaken every so often on a regular, but not annual, basis, such as redecorating almshouses when a resident moves out.

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

The mortgage debt for the 2004 development of thirty-two new almshouses at John Greenway Close remains the single largest financial commitment. The financial statements show the annual interest payment for the year £12,396 and reduction in the value of the outstanding mortgage of from £643,035 (2019) to £611,811 in 2020.

The mortgage is held in two separate accounts, one fixed until 2022 and one variable allowing just over half of the sum owing to be paid off at any time should directors deem prudent to do so.

4.

PLANS FOR THE FUTURE

A five-year plan (2017-2022) has been approved by Directors. In summary the aim within that plan over the five-year timescale is to:

• i. Improve/adapt housing to enable residents to stay as almshouse residents for as long as possible.

• ii. Improve warden services to enable residents to stay as long as possible.

• iii. Work with third parties to assist in providing the next step for residents requiring greater care.

• iv. To improve public awareness of the Trust, including awareness within local organisations.

• v. To investigate the provision of new almshouses where the opportunity arises.

• vi. To ensure all commercial properties are fully let and updated where necessary for new tenants.

The five-year plan translated into the following annual plan and achievements for 2020:

• i. To refurbish the bathrooms within vacant ground floor flats at John Greenway Close to shower rooms. It was decided to include refurbishment of all vacant units whether ground or first floor.

• ii. To investigate the provision of greater support for residents (through telecare, midday meals). The replacement of the Tunstall emergency call system took place in 2019.

• iii. Tender process was implemented for the refurbishment of one vacant commercial property and 4 residential flats above it. Work was completed in 2020.

• iv. A review of accounting software and IT systems was undertaken, and new more efficient systems introduced.

• v. During the consideration of the Reserves Policy, Directors decided to widen the search for a redevelopment opportunity for additional almshouses and this was a focus for 2020, with options being investigated.

• vi. To undertake talks, advertising, greater social media reach and closer liaison with the local community, local groups and Mid Devon District Council with a view to increasing the awareness of the Trust in providing homes for local older people in need, good progress has been made on this objective.

5. CHARITY STRUCTURE, GOVERNANCE AND MANAGEMENT

Tiverton Almshouse Trust is regulated by The Charity Commission and the Regulator of Social Housing (formerly the HCA). Under the latter, it is classed as a Registered Provider of social housing. In 2014 a new Charity Commission Scheme changed the way the Trust was governed. Tiverton Almshouse Trust is a registered charity with the objects outlined above (see section 1). The 2014 Scheme gave permission for the charity to have one corporate trustee rather than twelve individual trustees and, as a result, a new company limited by guarantee known as Tiverton Almshouse Trustee Ltd was established to be that sole trustee.

Within the company (the corporate trustee) are the twelve voluntary directors (previously called trustees). The Tiverton Almshouse Trust Scheme provides the corporate trustee with the same powers as before and the Articles of Association provide further provisions. The incorporated structure is more recognisable to banking and commercial sectors and provides directors with increased indemnity protection.

The directors have a term of appointment of five years . directors can be re-appointed and there is no maximum number of terms for re-appointment. Instead, directors due for retirement on the rotation basis are interviewed by the Recruitment Sub-committee under an agreed procedure which remains the same for all directors.

A set series of seven questions probing the interviewee’s commitment to the charity and its purpose, the time available for the necessary workload, the skills that can be brought to the board and the individual’s hopes and aspirations for the charity for the next five years are all discussed in depth and reported back to the board at the AGM when re-appointments are decided. In this way the board can retain committed and energetic directors regardless of their length of term.

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

Prior to appointment and re-appointment directors must sign the Charity Commission’s Declaration of Eligibility to serve. At each meeting of the board and the sub-committees, all potential, real and perceived conflicts of interest, loyalty and perception are declared, recorded and discussed. In the event of a conflict or likelihood of a conflict the director in question is asked to leave the room at the appropriate time or refrains from voting on the matter in question.

There are currently the eleven of the full twelve permitted directors under the Articles of Association. The board considers that it has the necessary skills and attributes without actively seeking an additional director. The internal audit of the board takes place at the AGM in May.

Directors

Directors
Name	Position	Date appointed/resigned	Skills and experience
John A Pulford	Chairman	Reappointed 14 May 2019	Retired Local Government Officer
Brenda Stanley	Director	Reappointed 5 May 2019	Retired Businesswoman
Alison W Maunder	Director	Reappointed 8 May 2018	Retired volunteer Age UK, retired Nurse.
Michael H C Biggin	Director	Reappointed 3 May 2019	Retired Finance Manager
John N Rendle	Director	Reappointed 8 May 2018	Businessman
Janice A Hutchinson	Director	Reappointed 9 May 2017	Retired Teaching Assistant
David H Hamer	Director	Reappointed 14 May 2019	Retired Chaplain
Robert J Cumes	Director	Reappointed 3 May 2016	Retired Operations Manager
Victoria Burston	Director	Appointed 14 May 2019	Business Owner
Susan Hollins	Director	Resigned 7 July 2020	Counsellor
Nominated directors appointed by Tiverton Town Council:
Wallace Burke	Director	Re-nominated 14 May 2019	Town Councillor
Claudette Harrower	Director	Re-nominated 14 May 2019	Town Councillor

Office of the Trust

The office of the Tiverton Almshouse Trust is: The Market House, 18 Bampton Street, Tiverton, Devon EX16 6AA.

Trust Staff

Trust Staff
D Woodward	Chief Executive
A Parkins	Property Manager
N Anderson	Finance Administrator (Appointed 21stSeptember 2020)
L Brooks	House Manager
H Evans	Secretary/Receptionist
G Strong	Handyman/Gardener
M Pike	Cleaner
Resident Wardens
L Pearce	Resident Warden, John Greenway Close
E.Kerrigan	Resident Warden, Greenway Gardens (Appointed 26thOctober 2020)

Advisors to the Trust
Auditors:	PKF Francis Clark, Centenary House, Exeter, Devon
Accountants:	William Withers & Co., Quayside House, Tiverton, Devon
Bankers:	Unity Trust Bank, 9 Brindley Place, Birmingham
Solicitors:	Ashfords, Gotham House, Tiverton, Devon
Investment advisors:	Investec Wealth & Investment, Keble House, Southernhay Gardens,
Exeter Commercial surveyors:	Mettam Ware, 15A Fore Street, Tiverton and Stratton Creber, 20
	Southernhay West, Exeter
Property Surveyors:	Assinder Turnham, 6/7 Southernhay West, Exeter

Structure of the Trustee’s Board of Directors

The board of directors comprises an elected chairman and vice-chairman who are voted a year of office at the AGM held every May. The board of directors meets quarterly each year at the Trust’s offices.

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

In addition, there are four sub-committees:

1. Property & Finance which meets every six weeks

2. Pastoral (an executive committee) which meets every six weeks

3. Policy which meets as necessary and not less than twice per year (in practice every two months)

4. Recruitment which meets between November and May each year prior to the retirement by rotation at the AGM and as necessary when a director vacancy arises.

Board meetings are held four times each year with an AGM in May. No business may be transacted at a board meeting unless four directors are present as a quorum.

Following the incorporation, directors approved a governance policy covering the way business is transacted within the sub-committees and within the main board in line with the Articles of Association. The governance policy was revised in 2018.

Director Vacancies

Vacancies for nominated directors are filled by Tiverton Town Council held in accordance with the ordinary practice of the Town Council. They elect two councillors as their representatives on the Trust’s board and the term is for four years.

The Articles allow for retirement by rotation meaning that at each AGM one-fifth of the elected directors retire from office. Retiring directors can re-apply for another term and will be asked to meet with the Recruitment SubCommittee prior to the AGM to discuss their application (see above and below).

The approved policy for recruiting new directors is to advertise following a skills audit of the board and includes provisions for appointment, declarations and managing conflicts of interest/loyalty.

Once appointed, the new director is encouraged to visit all the almshouse sites (if they have not already done so) accompanied by the CEO, house manager or a member of the office staff. In addition, the new director is invited to sit as an observer on all sub-committee meetings for a period of at least six months to enable them to become familiar with workings of the Trust and the day-to-day issues. After the six-month induction, the new director is encouraged to participate within one or more sub-committees when appointments are made at the AGM.

Appointment and Training of staff

Members of staff are appointed in accordance with the approved policy. Remuneration of all staff is reviewed on an annual basis in April and increases are based upon a comparison with public sector and private sector pay settlements. When available more specific comparisons are made with other almshouse or housing charities of the same size and operation.

A rolling programme of training is operated including fire procedures, health and safety risk assessments, food hygiene, first-aid, working at height, safeguarding, lone-working, mental health awareness and data protection. The Almshouse Association provides the most relevant and practical forum for directors and staff training.

Applying the Charities Code of Governance 2017

The corporate trustee has considered, in detail, the best practice guidelines within the Code. There is an obligation upon charities to apply the Code or explain why they have not. Whilst the overwhelming majority of markers have been met there are some which are in the process of being more fully integrated such as (benchmarking). The corporate trustee has also reviewed the changes made to the code in December 2020 and they will continue to apply this code going forward.

Some guidelines are not applied for good reason. Contracts with local sub-contractors undertaking small-scale routine maintenance work are kept as verbal contracts in the interest of speed, efficiency and experience of comparative costs.

Regarding director appointments, the corporate trustee considers that a restriction on length of term would not be in the best interest of the organisation for the following reasons:

• i. There is a robust written procedure on trustee appointments that takes a pragmatic view of the size of Tiverton and the availability of volunteer directors.

• ii. Each director has a peer review at the end of their term with set questions relating to the skills, time and level of commitment they can give to the Trust. Responses are considered by the Recruitment

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

Sub-Committee (which consists of different members each year) and a recommendation is made to the Board at the AGM.

• iii. Past experience has shown that professionals appointed as directors can lead to conflicts of interest and loyalty given the size of the town.

• iv.

• Consistency and local knowledge are highly valued by directors.

• v. Directors consider that it is not the length of term but the added value and input a director can give to the Trust that is important.

• vi. In the event of a vacancy, directors would be willing to be flexible and adapt current meeting arrangements in order to ensure a diverse board.

Applying the Value for Money Standard 2018

Tiverton Almshouse Trust is a registered social provider and, as such, published annual evidence within these statutory accounts to enable stakeholders to understand our performance as compared with the metrics set out by the regulator, compare those to our peer group and address any areas of underperformance.

Tiverton Almshouse Trust has recently joined Acuity Benchmarking Group for small social housing providers and our second annual benchmarking report has recently been submitted. Improvements we have made in collecting and collating our data this year has increased the accuracy of the submitted figures.

The Trust scored very highly in terms of resident satisfaction and repairs performance. Our management of voids, regarding costs and the time to turn these around, were at the lower end of the median but it was clear that there were some differences in how organisations accounted for this element of the process.

Our WMC collection and arrears were below the average and our sickness absence figures were the lowest within the group. Our weekly spend per property is in line with similar costs across comparable organisations.

The Trusts repairs and maintenance costs are above the average in some cases as are our overheads but when considered as a proportion of our turnover, it returns the Trust to the median line. Management costs have increased due to having new staff in a new post and higher qualified staff in another. Further, improved reporting on staff recording work related to Almshouses has also contributed to the increase.

Our Major and Cyclical works are high compared to other organisations in part due which type of services are consider Cyclical by different organisations; the Trust has recorded the Tunstall emergency call system as cyclical for example.

The standard refers to activities across the board and includes activities relating to the Trust’s investment properties where relevant.

There are seven metrics within the standard:

1. Reinvestment (the scale of investment into existing housing, acquisition or development of new housing in relation to the size of the asset base). This metric looks at the investment in properties as a percentage of the value of total properties held. The Trust did not acquire or develop any new housing in 2020 and currently operates 83 social housing units. The measure for The Trust in 2020 is 5.67% (2019: 5.91%). In both years the expenditure on existing properties has been a combination of programmed refurbishments of bathrooms to shower rooms and a rolling programme replacing boilers. The section on Maintenance of Almshouses contains further detail.

2. New supply delivered (units acquired or developed in the year as a proportion of existing housing stock). Given there were no additional units acquired the measure is zero.

3. Gearing (Proportion of borrowing in relation to the size of the asset base). The Trust’s borrowing relates to a mortgage taken out when the 2004 new development of 32 houses was built. The loan is valued at £611,811 at 31 December 2020 representing a gearing of 15.14% (2019: 15.92%). The board is not proposing to take on any further loans in 2021 and reviews annually the financial benefits of paying off part of the mortgage that is unfixed versus the interest and return on investments.

4. Earnings before interest, tax, depreciation and amortisation major repairs included (Indicates liquidity and investment capacity). The EBITDA MRI interest cover seeks to measure the level of surplus that is generated compared to interest payable. The Trust’s measure for 2020 is 113.62% (or 1.136 times).

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

1. Social housing cost per unit The Trust’s social housing cost per unit for 2020 was £2,937, (2019 £2,690) the applicable costs related to management, repairs and maintenance and service costs which was higher in 2020 due to works to replacing boilers, kitchens, bathrooms and upgrading works.

2. A Operating Margin % (Social Housing Lettings Only) demonstrates the profitability of operating assets before exceptional expenses are taken into account. In calculating this only operating costs directly attributable to social housing costs have been included, the margin for the Trust for 2020 was 17.21% (2019: 20%).

3. B Operating Margin % (Overall) as above however including all operating costs against social housing income and rents receivable from investment properties the margin for the Trust for 2020 was -2.32% (2019: 5%). Although the Trust’s total expenditure (note 4) has decreased compared to 2019, the 2019 calculation included an adjustment for various exceptional costs (totalling £100,434). 2020 has seen an increase in some specific costs areas, partly as a result of COVID-19, as well as changes in staffing, resulting in a lower margin this year.

4. Return on capital employed % (ROCE) the metric compares the operating surplus to total assets less current liabilities, the Trust’s ROCE for 2020 was 0.13% (2019: 1.34%).

Managing Risk

The Corporate Trustee regularly reviews the potential risks to the Association and aims to take a balanced and proportionate view. Professional advice is taken where necessary and regularly.

Where decisions are taken to commit significant financial resources, the financial return is considered along with the social investment return and the furtherance of the charitable objectives.

Nevertheless, the corporate trustee is acutely aware of the potential risks facing the Trust and a rigorous system of checks and balances is in place and reviewed regularly. A detailed risk register serves to prioritise governance, operational, compliance and external factors that pose the greatest concern and a management plan is enforced to reduce exposure. Greatest risks can be grouped according to residual risk priority and summarised as follows in order of concern:

• i. Regulatory and Statutory

• a. Changes in government policy leading to reduced income, increased regulation and therefore increased expense and staff time.

• b. Maximising the positive impact upon beneficiaries but ensuring this is within the parameters of the Charity’s objects.

• c. Governance matters that arise from a small staff team (such as dependence on key staff).

• d. Recognising the potential for conflicting interests and loyalties given the directors within the corporate trustee are local lay people with numerous local connections and local businesses.

• e. Reducing the possibility of unknown changes in legislation and regulation (sometimes originating in indirect departments).

• ii. Specific risk mitigation measures relevant to the Financial Statement:

• a. Fraud: Day-to-day administration procedures are undertaken to reduce the risk of fraud and certain functions (such as payroll) are outsourced. An external financial review was undertaken in 2019 as good practice and also a new Fraud Policy and Fraud Response Plan was implemented to the robust list of policies and procedures already in place.

• b. Loss of Income (Property): Measures are taken to minimise almshouse voids (see report above) by advertising and maintaining close working relationships with local organisations and the local authority. Commercial rent levels have dropped considerably in recent years due to the uncertain economic climate preceded by a recession, but staff strive to ensure good working relationships with commercial tenants, keep the properties in good working order and keep close monitoring of rental payments to minimise the risk of arrears and to maintain continuity of tenants.

• c. Loss of Income (other assets): An annual investment review is held every November and monitored every six weeks by the Property & Finance Sub-Committee. An approved Investment Policy is reviewed every three years. Discretionary power has been given to the Trust’s brokers who manage the largest portfolio, other investment providers are managed funds or deposit accounts. The corporate trustee aims for a wide variety of deposit accounts balancing long term and short-term investments and, as far as reasonably possible, invests no more than the maximum cover provided by the Financial Services Compensation

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

Scheme.

• d. Unforeseen Property Repair Costs: Quinquennial surveys are commissioned, and the results incorporated into a rolling programme of maintenance within the budget forecast. Unforeseen works are therefore restricted to extraordinary events (such as flooding as a result of a leak) and usually covered by insurance. Routine maintenance is seen as a core activity.

The chief executive is responsible for the day-to-day management of health and safety matters and directors are also aware of their statutory duties under legislation through regular sub-committees. Risk assessments are carried out annually by the property manager/chief executive and regularly updated throughout the year in a working file. Fire risk assessments are carried out annually by the property manager/chief executive and every three years professionally.

A comprehensive list of policies and procedures is reviewed on a one - three-year rolling programme or as a result of changing legislation or best practice guideline, whichever is the soonest. Regular staff meetings ensure that new procedures are implemented.

Meetings with residents are held annually where matters of health and safety are discussed and reinforced, including the procedure in the event of a fire. A fire drill is held annually.

Residents are encouraged to ask questions and provide feedback verbally, or in writing or thorough our suggestion boxes on site. Once a year, the chief executive meets with all residents to discuss the next year’s draft annual plan, as well as the results from the residents’ satisfaction survey. Staff meetings for office employees, including line managers happen as frequently as possible.

Directors and staff remain vigilant on matters of risk and continue to seek advice and updates from legal bodies, the Charity Commission, the Social Housing Regulator and the Almshouse Association.

Impacts of COVID-19

2020 was the year, none of us could have expected with a global pandemic bringing a profound change to how we would all live and work and interact as a community. This resulted in residents not being able to see their families, our resident events and activities put on hold. Many of our residents would be considered to be high risk to COVID-19 because of their age, underlying health conditions and because of the drastic changes to their external support networks in the community that had to close or remain restricted.

Operationally, this meant that it was necessary to implement a number of significant changes which included some staff working remotely from home, residents being contacted by their wardens by phone only and staff and director meetings being by virtual Zoom videos. The Trust risk register was updated to consider all areas of potential risk from the pandemic, both operationally and strategically.

The Trust responded proactively to the COVID-19 pandemic, with our robust risk assessments already embedded in the Trust and put in place all additional measures on top of what we normally provide to keep residents and staff safe and well. Staff were supported with additional computer equipment to work remotely and appropriate PPE. All safety checks continued in relation to fire and legionella. Urgent repairs continued with strict safety measure. The impact for the Trust was loss of some income during lockdown we could not get contractors in to carry out work to flats that became vacant and additional costs for PPE, sanitiser units, equipment. The staff team at the Trust worked tirelessly to adapt to each unprecedented change due to the pandemic and to ensuring residents safety and well-being remained, as always, our priority and focus.

Commercial tenants were supported with flexible payment plans to help them when their retail businesses had to close due to Government restrictions and these payments have now been brought up to date. Our investment portfolio saw some losses due to the volatility of the market due to the pandemic.

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REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

STATEMENT OF DISCLOSURE OF INFORMATION TO AUDITORS

The corporate trustee of the charity which held office at the date of approval of these Financial Statements as set out above, confirms, so far as it is aware, that:

• there is no relevant audit information of which the charity’s auditors are unaware; and

• it has taken all the steps that it ought to have taken as corporate trustee in order to make itself aware of any relevant audit information and to establish that the charity’s auditors are aware of that information.

Approved at a meeting of the corporate trustee held on 11 May 2021

Signed on its behalf by:

Mr J Pulford – Director (Chairman)

Mr R Cumes – Director (Vice-chair)

Mrs D Woodward (Chief Executive)

14

TIVERTON ALMSHOUSE TRUST STATEMENT ON INTERNAL CONTROL SYSTEMS YEAR ENDED 31 DECEMBER 2020

The corporate trustee is responsible for maintaining a sound system of internal control which:

• focuses on the significant risks that threaten the organisation’s ability to meet its objectives; and

• provides reasonable assurance of the safeguarding of assets.

The corporate trustee is also responsible for reviewing the effectiveness of the system of internal control.

The internal control system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable, and not absolute, assurance against material misstatement or loss.

The process for identifying, evaluating and managing the significant risks faced by the charity is ongoing. This process has been in place for the year ended 31 December 2020 and up to the date of approval of the corporate trustee’s report and financial statements and is regularly reviewed by the corporate trustee.

Experienced and suitably qualified management staff take responsibility for important business functions. Appraisal procedures have been established to maintain the standards of performance.

All significant new initiatives, major investments and investment projects are subject to formal authorisation procedures, through the Property and Finance Sub Committee and/or the board.

The Property and Finance Sub Committee reviews reports from senior staff on behalf of the Board and from the external Accountants and separate Auditors to provide assurance that control procedures are in place and are being followed. The Property and Finance Sub Committee informs the Board in this regard on a regular basis.

Procedures have been established for instituting appropriate action to correct weaknesses identified from the above report.

15

TIVERTON ALMSHOUSE TRUST CORPORATE TRUSTEES’ RESPONSIBILITIES STATEMENT YEAR ENDED 31 DECEMBER 2020

The Charities Act 2011 and registered social housing legislation require the corporate trustee 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 its income and expenditure for that period.

In preparing these financial statements, the corporate trustee is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements 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 corporate trustee is responsible for keeping proper accounting records which 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 Housing and Regeneration Act 2008 and the Accounting Direction for private registered providers of social housing in England 2019. The corporate trustee has general responsibility for taking reasonable steps to safeguard the assets of the Trust and to prevent and detect fraud and other irregularities.

16

INDEPENDENT AUDITOR’S REPORT TO THE CORPORATE TRUSTEE OF TIVERTON ALMSHOUSE TRUST

Opinion

We have audited the financial statements of Tiverton Almshouse Trust for the year ended 31 December 2020 which comprise the Statement of comprehensive income (including income and expenditure account), Statement of financial position, Statement of changes in equity and reserves, Statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the Charity’s affairs as at 31 December 2020 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

• and have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been properly prepared in accordance with the Charities Act 2011, the Housing and Regeneration Act 2008 and the Accounting Direction for private registered providers of social housing in England 2019.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The corporate trustee is responsible for the other information. The other information comprises the information included in the report of the corporate trustee, 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

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INDEPENDENT AUDITOR’S REPORT TO THE CORPORATE TRUSTEE OF TIVERTON ALMSHOUSE TRUST (CONTINUED)

Opinion on other matter prescribed by the Charities Act 2011

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the Trustees’ Report has been prepared in accordance with applicable legal requirements.

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 requires us to report to you if, in our opinion:

• the information given in the corporate trustee’s report is inconsistent in any material respect with the financial statements; or

• sufficient accounting records have not been kept; or

• the financial statements are not in agreement with the accounting records; or

• we have not received all the information and explanations we require for our audit.

In addition, we have nothing to report in respect of the following matter where the Housing and Regeneration Act 2008 requires us to report to you if, in our opinion:

• a satisfactory system of control over transactions has not been maintained.

Responsibilities of corporate trustee

As explained more fully in the Corporate Trustee’s Responsibilities Statement (set out on page 16), the corporate trustee is 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 Corporate trustee 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 corporate trustee is 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 corporate trustee either intends to liquidate the charity or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

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

Based on our understanding of the Trust and nature of the business, we identified the principal risks of noncompliance with laws and regulations as being those which have a direct impact on the preparation of the financial statements, such as The Charities Act 2006, and relevant tax legislation (VAT etc.), as well as legislation governing responsibilities as a social housing landlord. We considered the extent to which noncompliance with these laws and regulations may have a material effect on the financial statements.

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INDEPENDENT AUDITOR’S REPORT TO THE CORPORATE TRUSTEE OF TIVERTON ALMSHOUSE TRUST (CONTINUED)

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

Based on this understanding we designed our audit procedures to identify irregularities. Our procedures involved the following:

• Enquiries of those charged with governance, regarding their knowledge of any non-compliance or potential non-compliance with laws and regulations that could affect the financial statements;

• Review of minutes of meetings of those charged with governance;

• Evaluation of the effectiveness of management’s controls designed to prevent and detect irregularities including those applicable to social housing landlords;

• Challenging assumptions and judgements made by management in its significant accounting estimates;

• Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to become aware of instances of non-compliance. 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, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the Charity’s corporate trustee, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008 and section 137 of the Housing and Regeneration Act 2008. Our audit work has been undertaken so that we might state to the Charity’s corporate trustee those matters we are required to state to the corporate trustee 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’s corporate trustee as a body, for our audit work, for this report, or for the opinions we have formed.

PKF Francis Clark , Statutory Auditor

Centenary House Peninsula Park Rydon Lane Exeter EX2 7XE Date: 14 May 2021

PKF Francis Clark is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

19

TIVERTON ALMSHOUSE TRUST STATEMENT OF COMPREHENSIVE INCOME (INCLUDING INCOME AND EXPENDITURE ACCOUNT) YEAR ENDED 31 DECEMBER 2020

			As restated
	Note	2020	2019
		£	£
Turnover	2	769,178	756,788
Less: Operating costs	4	786,986	801,889
Operating deficit	5	(17,808)	(45,101)
Income from fixed asset investments		30,491	68,239
Interest receivable and similar income	9	14,263	144,169
Interest payable and similar charges	10	(12,396)	(14,506)
Unrealised/realised gains and losses on investments	12	102,087	316,219
Revaluation of investment properties		80,000	-
Surplus on ordinary activities for the year before tax		196,637	469,020
Tax on surplus on ordinary activities		-	-
Surplus / (deficit) for the year after tax		196,637	469,020
Revaluation of tangible fixed assets		-	55,000
Total comprehensive income for the year		196,637	524,020

Signed on behalf of the corporate trustee on 11 May 2021

Mr J Pulford – Director (Chairman)

Mr R Cumes – Director (Vice-chair)

The annexed notes form part of these financial statements.

20

TIVERTON ALMSHOUSE TRUST STATEMENT OF FINANCIAL POSITION YEAR ENDED 31 DECEMBER 2020

Notes Fixed assets Tangible fixed assets 11 Investment properties 11 Other fixed assets 11 Investments 12 Current assets Debtors 13 Cash at bank and in hand Creditors: amounts falling due within one year 14 Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year 15 Capital and reserves Permanent endowment 18 Expendable endowment 18 Income and Expenditure reserves 17	2020 £ £ 4,040,000 2,863,414 427,240 3,359,604 10,690,258 49,235 969,601 1,018,836 110,196 908,640 11,598,898 580,009 11,018,889 8,610,142 903,138 1,505,609 11,018,889	2019 £ £ 4,040,000 2,877,500 76,503 3,250,522 10,244,525 31,024 1,275,981 1,307,005 116,242 1,190,763 11,435,288 613,035 10,822,253 8,529,000 865,209 1,428,044 10,822,253	2019 £ £ 4,040,000 2,877,500 76,503 3,250,522 10,244,525 31,024 1,275,981 1,307,005 116,242 1,190,763 11,435,288 613,035 10,822,253 8,529,000 865,209 1,428,044 10,822,253
			10,244,525 1,190,763 11,435,288 613,035 10,822,253
	1,018,836 110,196	1,307,005 116,242
			8,529,000 865,209 1,428,044
			10,822,253

These financial statements were approved and authorised for issue by the corporate trustee on 11 May 2021

and signed on its behalf by:

Mr J Pulford - Director

Mr R Cumes - Director

The annexed notes form part of these financial statements.

21

TIVERTON ALMSHOUSE TRUST STATEMENT OF CHANGES IN EQUITY AND RESERVES YEAR ENDED 31 DECEMBER 2020

At 31 December 2019 Surplus for year before gains and losses from investments Unrealised/realised gains and losses on investments Revaluation of tangible fixed assets Total comprehensive income Transfers At 31 December 2020	Permanent Expendable Other Endowment Endowment Reserves Total £ £ £ £ 8,529,000 865,209 1,428,044 10,822,253 - - 14,550 14,550 1,142 37,929 63,015 102,086 80,000 - - 80,000 81,142 37,929 63,015 196,636 - - - - 8,610,142 903,138 1,505,609 11,018,889	2019 £ 10,298,333
		152,801 316,219 55,000
		524,020
		-
		10,822,253

The annexed notes form part of these financial statements.

22

TIVERTON ALMSHOUSE TRUST STATEMENT OF CASHFLOWS YEAR ENDED 31 DECEMBER 2020

Note Net cash flow from operating activities 24 Cash flow from investing activities Rents received from investment properties Payments to acquire tangible fixed assets Receipts from sales of tangible fixed assets Payments to acquire investments Proceeds from sale of investments Purchase of investments Interest received Dividends received Net cash flow from investing activities Cash flow from financing activities Repayment of long term loans Net cash flow from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents as at 1 January 2020 Cash and cash equivalents as at 31 December 2020 Cash and cash equivalents consist of: Cash at bank and in hand Cash held as part of investment portfolio	2020 £ (295,841) 257,271 (259,258) - - 8,517 (278,748) 11,573 30,491 (230,154) (43,620) (43,620) (569,615) 1,561,112 991,497 969,601 21,896 991,497	2019 £ (359,772) 254,903 (2,254) - - 929,612 (665,694) 26,039 68,239
		610,845 (44,434)
		(44,434) 206,639 1,354,473
		1,561,112
		1,275,981 285,131
		1,561,112

The annexed notes form part of these financial statements.

23

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General information and basis of preparation

Tiverton Almshouse Trust is incorporated under the Charities Act 2011 and is a Registered Provider of Social Housing in the United Kingdom.

Tiverton Almshouse Trust constitutes a public benefit entity as defined by FRS 102.

The financial statements have been prepared in accordance with applicable accounting standards including Financial Reporting Standard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102), the Statement of Recommended Practice for Social Housing Providers 2018, and with the Accounting Direction for private registered providers of social housing in England 2019, and the Charities Act 2011.

The financial statements are prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value.

The financial statements are prepared in sterling, which is the functional currency of Tiverton Almshouse Trust and rounded to the nearest £.

The registered office is disclosed in the Report of the Corporate Trustee.

Housing properties

Housing properties are principally properties available to beneficiaries of the trust in return for weekly maintenance contributions.

Housing properties are included at deemed cost and are reviewed for impairment at the end of each reporting period.

Investment Properties

Investment properties are principally properties available to tenants of the trust in return for a commercial rent.

Investment properties are included at valuation, representing fair value and at each reporting date any changes in fair value are recognised in the statement of comprehensive income. Professional valuations are undertaken on a 5-year rolling cycle.

Investment properties are reviewed for impairment at the end of each reporting period.

24

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

Fixed assets and Depreciation

Other fixed assets are stated at cost, less accumulated depreciation. Depreciation is charged on a straight-line basis at rates anticipated to write off the cost of the asset, at the following annual rates:

Housing properties Nil Freehold property Nil Computer equipment 33.33%

There is no depreciation charged this year against housing properties or freehold property as the corporate trustee believes the residual values are not lower than the current carrying value in the balance sheet. This opinion is based on the valuation of The Market House offices in 2018 and the valuation work down on the housing properties in 2019. It is the corporate trustee’s opinion that the local housing market remained static over the 2020 year, and they will be reviewing this throughout the 2021 financial year.

Investments

Investments are recognised initially at fair value which is normally the transaction price excluding transaction costs. Subsequently they are measured at fair value through the statement of comprehensive income.

Debtors and creditors receivable/payable within one year Debtors and creditors payable within one year are recorded at transaction price.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs and then subsequently adjusted for principal repayments and interest charged.

Revaluation surpluses and deficits

Where market value is not readily available, the Corporate trustee estimates market value. Revaluations of investments are reported in the Statement of Comprehensive Income.

Leased Assets

Rentals payable under operating leases are charged to the income and expenditure account on a straight-line basis over the period of the lease.

Government grants

A social housing grant was received back in 2004 as a contribution towards the capital cost. The grant was previously deducted from the cost of the housing properties. However, as the housing properties are accounted for using the valuation model, grants should now be accounted for using the performance model which means that grants are recognised as income once the performance conditions have been meet. This change has not altered the overall value of reserves.

Current Taxation

No taxation is payable by the charity, since it has charitable status and its activities are exempt from tax.

Value Added Tax

Irrecoverable VAT which can be attributed to capital items or revenue expenditure is added to the cost of the capital item or expenses where practicable and material.

Pension Costs

The charity operates a defined contribution scheme for the benefit of its employees. The costs of contributions are written off through the income and expenditure account in the year they are payable.

Dilapidations

Monies receivable in respect of dilapidations are generally not accounted for until they can be determined with reasonable accuracy.

25

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

Turnover

Turnover is measured at the fair value of the consideration received or receivable.

Turnover represents rental and service charges income receivable in the year net of rent and service charge losses from almshouse voids.

Interest and dividends receivable

Interest and dividend income is recognised as Tiverton Almshouse Trust’s right to receive payment is established.

Key judgements and estimates

The following judgements and estimates have been made in the process of applying the above accounting policies that have had the most significant effect on amounts recognised in the financial statements:

The corporate trustee has established a five-year cycle for investment properties to be valued by an external RICS qualified surveyor. In the intervening years the remaining properties are valued by the corporate trustee having regard to all risks, the yield, the strength of the market and comparison with similar properties.

Reclassification of comparative Statement of Comprehensive Income

Comparatives in respect of investment property income and expenditure, as well as gains on investments have been restated to ensure they are correctly disclosed in the financial statements in line with FRS 102.

• 2 TURNOVER

3		2020	2019
		£	£
	Rents receivable excluding service charges	420,589	408,916
	Service charges receivable	99,632	100,016
	Rent and service charge losses from voids	(8,554)	(9,662)
	Guest room income	240	2,615
	Social Housing Turnover	511,907	501,885
	Investmentpropertyincome	257,271	254,903
		769,178	756,788
	UNITS IN MANAGEMENT
		2020	2019
	Social housing for older people	83	82
	Warden accommodation	3	4
		86	86

26

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

4 OPERATING COSTS

4 OPERATING COSTS
	Support	Social	Investment		Tl 2020	Total
	Costs	Housing	Properties		ota	2019
	£	£	£		£	£
Estate management costs:
Wages and salaries	-	39,882	59,823		99,705	56,033
Estate costs
Repairs and maintenance	-	228,879	30,964		259,843	260,846
Professional fees	-	24,769	31,613		56,382	10,497
Utilities	-	95,235	18,189		113,424	167,480
Insurance	-	20,160	5,012		25,172	12,857
Sundry expenses	360	3,546	1,971		5,877	5,168
Waste	355	6,182	650		7,187
Cleaning	673	5,163	2,078		7,914
Bad debt	-	-	-		-	1,251
Administrative costs
Wages and salaries	154,879	-	-		154,879	164,029
Staff recruitment costs	-	-	-		-	15,575
Office running costs	23,030	-	-		23,030	31,559
Accountancy and audit fees	17,541	-	-		17,541	14,615
Professional fees	-	-	-		-	36,686
PI insurance	578	-	-		578	578
Subscriptions	2,295	-	-		2,295	2,340
Bank charges	1,060	-	-		1,060	862
Donations	-	-	-		-	10,000
Depreciation	2,607	-	-		2,607	2,700
Investment mgm’t fees	9,492	-	-		9,492	8,813
	212,870	423,816	150,300		786,986	801,889
Apportionment	(212,870)	113,414	99,456		-	-
	-	537,230	249,756		786,986	801,889

5 OPERATING DEFICIT

ERATING DEFICIT
	2020	2019
	£	£
Operating deficit is stated after charging:
Operating leases - other assets	1,524	847

6 AUDITORS’ REMUNERATION

	2020 £	2019
		£
Audit services	3,570	6,000
Non audit services(includes fees from theprevious auditor)	13,971	8,615
	14,615	12,177

27

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

7 BOARD OF DIRECTORS OF THE CORPORATE TRUSTEE AND KEY MANAGEMENT PERSONNEL REMUNERATION

	2020	2019
	£	£
The aggregate emoluments payable to key management personnel	70,590	68,600

The chief executive is not a member of the charity’s defined contribution pension scheme. However, the charity makes contributions to their personal pension plan. During the period the total amount contributed to the personal pension was £4,873 (2019 £1,841).

The Board of Directors of the corporate trustee received no expenses or remuneration in the year.

• 8 EMPLOYEE INFORMATION

	2020	2019
The average number of persons employed during the year expressed in full time equivalents (16 hours or more per week) was:
Office staff	5	5
Wardens,cleaners and handyman	4	4
	9	9
	£	£
Staff costs (for the above persons)
Wages and salaries	219,068	195,602
Employer's National Insurance Contributions	20,256	13,859
Otherpension costs	15,259	10,601
	254,583	220,062

During the year one employee earned more than £60,000 (2019: one employee).

• 9 INTEREST RECEIVABLE AND SIMILAR INCOME

	2020	2019
	£	£
Interest received	11,573	26,039
Realised gain/(loss) on the disposal of investments	-	118,109
Miscellaneous income	2,690	21
	14,263	144,169

28

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

10 INTEREST PAYABLE AND SIMILAR CHARGES

	2020	2019
	£	£
Mortgage interest	12,396	14,506
Realised loss on the disposal of investments	-	-
	12,396	14,506

11 TANGIBLE FIXED ASSETS

	Housing Properties	Investment Properties	Freehold Property	Computer Equipment	Computer Equipment	Total
	£	£	£	£		£
COST OR VALUATION
At 1 January 2020	4,040,000	2,877,500	75,000	8,893		7,001,393
Additions	-	255,914	-	3,344		259,258
Transfer	-	(350,000)	350,000	-		-
Revaluations	-	80,000	-	-		80,000
At 31 December 2020	4,040,000	2,863,414	425,000	12,237		7,340,651
DEPRECIATION
At 1 January 2020	-	-	-	7,390		7,390
Charge foryear	-	-	-	2,607		2,607
At 31 December 2020	-	-	-	9,997		9,997
NET BOOK VALUE
At 31 December 2020	4,040,000	2,863,414	425,000	2,240		7,330,654
At 31 December 2019	4,040,000	2,877,500	75,000	1,503		6,994,003

HOUSING PROPERTIES

Housing properties comprise freehold land and buildings.

Historically, housing properties have been accounted for under the revaluation model and have been formally valued on a five-year cycle, with the corporate trustee providing a valuation for four of the five years. Due to the specialist nature of almshouse valuations, the lack of readily available market information to which the corporate trustee has access, as well as the cost burden on the Trust of moving to an annual valuation cycle, the corporate trustee has decided it would be more appropriate to account for freehold property under the cost model, in line with section 17 (property plant and equipment) of FRS 102

Housing properties are now included at deemed cost of £4,040,000 (historic cost: £4,288,895).

29

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

INVESTMENT PROPERTIES

The corporate trustee has established a five-year cycle for investment properties to be valued by an external RICS qualified surveyor.

The freehold interests in 2 - 16 Bampton Street, Tiverton were valued as at 31 December 2020 by an external valuer, Michael Lloyd, BSc (Hons) MRICS of Stratton Creber, Chartered Surveyors. The valuation was prepared in accordance with the requirements of the RICS Valuation – Global Standards, SORP and FRS102.

The Trust occupies office accommodation within The Market House for the purpose of its operations, the value the external valuer provided for these offices (£350,000) have been transferred to Freehold Property. This was carried out in 2018, but the transfer was not reflected in the 2018 financial statements. Consequently, it has been corrected for in these financial statements. The basis of value was Fair Value.

The remaining investment properties held were valued by the corporate trustee on the basis of fair value as at 31 December 2020.

Valuation is represented by:	2020	2019
	£	£
Historical cost	296,927	296,927
Revaluation	2,566,487	2,580,573
	2,863,414	2,877,500
Revaluation:	2020	2019
	£	£
Balance as at 31 December 2019	2,580,573	2,580,573
Net of additions and transfers	(94,086)	-
Revaluation	80,000	-
Balance as at 31 December 2020	2,566,487	2,580,573

30

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

12 INVESTMENTS HELD AS FIXED ASSETS

(Financial assets measured at fair value through the surplus/ (deficit))

	2020	2019
	£	£
MARKET VALUE OF LISTED INVESTMENTS
At 31 December 2019	3,250,522	2,761,259
Additions	262,261	665,694
Income reinvested	16,487	63,739
Disposal proceeds	(8,517)	(929,612)
Realised gains/(losses)	(4,327)	118,109
Unrealisedgains/(losses)	106,414	316,219
At 31 December 2020	3,622,840	2,995,408
Cash held as part of investment portfolio (movement)	(263,236)	255,114
	3,359,604	3,250,522
Historical cost	2,593,996	2,587,000

13 DEBTORS – ALL RECEIVABLE WITHIN ONE YEAR

	2020	2019
	£	£
Trade debtors
Social housing rent arrears	4,346	956
Social housing utility arrears	114	-
Other	8,123	3,125
	12,583	4,081
Prepayments and accrued income	32,482	22,154
Other debtors	4,169	4,789
	49,234	31,024

14 CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR

	2020	2019
	£	£
Mortgages	31,802	30,000
Trade creditors and rents paid in advance	43,437	30,071
Other creditors and accruals	34,956	56,171
	110,195	116,242

15 CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 2020 £ Mortgages 580,009	15 CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 2020 £ Mortgages 580,009
	2020	2019
	£	£
	580,009	613,035

31

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

16 MORTGAGES

(Financial liabilities measured at fair value through the surplus/ (deficit)).

Analysis of maturity of debt:	2020 £	2019
		£
Less than one year or on demand	31,802	30,000
Between one and two years	32,394	30,000
Between two and five years	100,871	120,000
After fiveyears	446,744	463,035
	611,811	643,035

The mortgages mature in July 2037.

Capital is repayable in monthly instalments, which commenced in August 2004. Interest is charged at 2.95% and LIBOR +0.65%.

The mortgages are secured on certain freehold housing and investment properties.

17 INCOME AND EXPENDITURE RESERVES

		Surplus
	2019	for year	Revaluation		Transferred	Utilised	2020
	£	£	£		£	£	£
Programme of works fund	20,814	-	-		122,430	(122,430)	20,814
Extraordinary repair fund	36,582	-	-		5,040	(510)	41,112
Cyclical maintenance fund	96,547	-	-		1,638	(38,075)	60,110
Routine works	5,208	-	-		62,326	(22,098)	45,436
Other	1,268,893	14,550	63,015		(191,434)	183,113	1,338,137
	1,428,044	14,550	63,015		-	-	1,505,609

Tiverton Almshouse Trust has established a regular programme of works.

Part of other reserves has been earmarked by the corporate trustee for a particular purpose. Such designations may be reversed by future Trustee decisions.

Expenditure is taken through the income and expenditure account. A transfer is then made as appropriate.

18 CAPITAL AND RESERVES

Permanent Endowment

These reserves represent the current value of the Housing and Investment Properties together with the current value of any other investments that were held at the date of the merger and cash deposited with Standard Life on behalf of Alexandra Lodge Trust as at the date of the merger.

Expendable Endowment

These reserves represent the current value of any investments purchased since the merger.

32

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

19 CAPITAL COMMITMENTS

	2020	2019
	£	£
Capital expenditure that has been contracted for but has not been provided for in the financial statements	-	232,245
	-	232,245

.

20 LEASING COMMITMENTS

Total future minimum lease payments under non-cancellable operating leases are as follows:

	2020 2019 £ £
Not later than one year	1,417 4,986
Later than one and not later than fiveyears	- 5,313
Later than five years	1,417 10,299

21 PENSION COSTS

The charity operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the charity in an independently administered fund. The pension cost charge represents contributions payable by the charity to the fund and amounted to £10,386 (2019: £10,601).

22 RELATED PARTY TRANSACTIONS

As at the 31 December 2020 two directors of Tiverton Almshouse Trustee Limited were councillors / employees of related Local Authorities.

The husband of one of the directors of Tiverton Almshouse Trustee Limited is a councillor/employee of related Local Authorities and a tenant of Raymond Penny House.

Any transactions with the Local Authorities were at arms-length on normal commercial terms and these individuals were not able to use their position to their commercial advantage.

23 CONTROL

The ultimate controlling party is the board of directors of Tiverton Almshouse Trustee Limited.

33

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

24 RECONCILIATION OF OPERATING SURPLUS / (DEFICIT) TO CASH FLOW FROM OPERATING ACTIVITIES

	2020		2019
	£		£
Surplus / (deficit) for the year	196,637		524,020
Rents received from investment properties	(257,271)		(254,903)
Mortgage interest paid	12,396		14,506
Interest received	(11,573)		(26,039)
Dividends received	(30,491)		(68,239)
Depreciation and impairment of tangible fixed assets	2,607		2,700
Realised (gain) / loss on disposal of investments	4,327		(118,109)
Unrealised (gains) / loss on investments	(106,414)		(316,219)
Income reinvested	-		(63,739)
Proceeds of sale of tangible fixed assets	-		-
Carrying amount of tangible fixed asset disposals	-		-
Revaluation on tangible fixed assets	(80,000)		(55,000)
(Increase) / decrease in trade and other debtors	(18,211)		(4,233)
Increase /(decrease)in trade and other creditors	(7,848)		5,483
Net cash flow from operating activities	(295,841)		(359,772)

25 ANALYSIS OF CHANGES IN NET DEBT

	2019	Cashflows	Non-cash changes	2020
	£	£	£	£
Long-term borrowings	613,035	-	(33,026)	580,009
Short-term borrowings	116,242	(39,072)	33,026	110,196
Total liabilities	729,277	(39,072)	-	690,205
Cash and cash equivalents	(1,561,112)	569,614	-	(991,498)
Total	(831,835)	530,542	-	(301,293)

34

Registered Social Landlord number: A1070 Registered Charity number: 206984

Report of the Trustees and Audited Financial Statements For the Year Ended 31 December 2020 For

TIVERTON ALMSHOUSE TRUST

TIVERTON ALMSHOUSE TRUST

Contents of the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2020

	Page
Report of the Corporate Trustee	1-14
Statement on internal control systems	15
Corporate Trustees’ responsibilities statement	16
Independent Auditor’s report	17-19
Statement of comprehensive income (including income and expenditure account)	20
Statement of financial position	21
Statement of changes in equity and reserves	22
Statement of cash flows	23
Notes to the financial statements	24-34

REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

The Corporate Trustee presents this report with the financial statements of the charity for the year ended 31 December 2020.

INTRODUCTION

The Corporate Trustee is pleased to report that the agreed objectives central to the work of the Tiverton Almshouse Trust of maintaining and improving core charitable activities, planning for the future and delivering a healthy financial position have been satisfied.

Tiverton Almshouse Trust is regulated by the Charity Commission and the Regulator of Social Housing (formerly the Homes & Communities Agency).

This report includes references to the Financial Statements attached and aims to address the regulatory requirements of the Regulator of Social Housing three economic standards: Value for Money, Governance & Financial Viability and the Rent Standard, throughout, as part of the reporting structure.

The total income this year in 2020 from charitable activities and other income was £813,932 (2019: £969,196). The total expenditure was £799,382 (2019: £816,395). The gain on investments was £102,087, which includes an unrealised gain of £106,414 and a realised loss of £4,327. During the year a gain on revaluation of investment properties of £80,000 was recognised. The surplus for the year is £196,637.

CODE OF GOVERNANCE

The Charities Code of Governance 2017 has been adopted by the Board in line with Charity Commission guidance. The corporate trustee has also reviewed the changes made to the code in December 20202 and they will continue to apply this c ode going forward. Tiverton Almshouse Trust falls between the Code for smaller and larger charities (defined as turnover below and above £1m respectively). The Board aspires to meet the recommendations set out for larger charities whilst maintaining a level of proportionality. The Code is produced by the NCVO, ICSA, ACEVO, Association of Chairs and the Small Charities Coalition with the oversight of The Charity Commission

1.

OBJECTIVES AND ACTIVITIES

The objects of the Tiverton Almshouse Trust in the Scheme made by the Charity Commission dated 10 September 2009 (as amended by the Scheme dated 28 July 2014) are:

• a. the provision of housing accommodation for poor persons not less than 60 years old who have lived in the area of benefit for not less than 2 years prior to the appointment.

• b. such charitable purposes for the benefit of the residents as the Corporate Trustee decides

• c. the relief of persons resident in the area of benefit who are in financial hardship by:

• i. making grants of money to them; or

• ii. providing or paying for goods, services or facilities for them; or

• iii. making grants to other organisations or institutions which provide goods, services or facilities for those in financial hardship.

The use of income and capital must firstly be applied to meet the proper costs of administering the charity and managing its assets (including repair and insurance of its buildings) and to make annual payments into the reserve funds considered necessary in the annual budget.

The remaining income to further the objects of the charity are made in the following order of priority:

• a. the benefit of the residents

• b. the relief of financial hardship of persons living in the area of benefit (which is Tiverton and environs).

The greatest activity within the Trust is the maintenance of its properties. In addition to almshouse accommodation, the Trust also owns investment property in Tiverton.

1

REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

The board considers that the objects are still relevant to the work of the charity. The popularity of the almshouse accommodation, the low level of voids and the financial security of the organisation means that it achieves, and can sustain, its objectives. Plans for the future address how those objectives can be taken forward to enable beneficiaries to continue to benefit from the Trust’s charitable activities as the government and society shifts to take care of a higher proportion of an ageing and frail older population.

Public Benefit

In carrying out the Trust’s aims and objectives and in measuring achievements and performance, the Corporate Trustee has had regard to the Charity Commission’s guidance dated February 2014 entitled “Public Benefit: rules for charities”. Given that the Trust’s objective is the relief of poverty (see objects above) only the benefit aspect of “public benefit” requires satisfying. The Commission specifies that the purpose of the charity must be beneficial in a way that is identifiable and capable of being proved by evidence where necessary and not based on personal views. Perhaps the most quantifiable measure to identify whether the charity has a benefit to the local population eligible for accommodation is the low level of voids within the almshouses. COVID-19 restrictions and lockdowns were the cause of a small number of voids in 2020 as work could not be completed during these periods to empty almshouses to get them ready for new residents. In effect, the Trust had no voids that were not directly attributable to the pandemic.

In line with the Trust’s governing scheme 2009, the charity provides housing for local people over 60 years old and in financial need. Through regular advertising, open days, contact with Mid Devon District Council, and local voluntary agencies such as Age UK and local charities such as the Churches Housing Action Trust (CHAT) the Trust reaches a wide audience. Eligible applicants waiting for accommodation are numerous and from a wide variety of backgrounds indicating that the Trust is reaching its beneficiary group. Nevertheless, The Corporate Trustee strives to raise the profile of the Trust within the town still further and the Annual Plan has specific targets for ensuring wider awareness which were met during the year. The rigorous application of a points system ensures each applicant meets the required criteria, enables each applicant to be prioritised primarily based on financial need. The applicant in greatest need at the time a vacancy arises is offered the accommodation regardless of how long they have been known on the list.

Tiverton Almshouse Trust almshouse properties are usually fully occupied with no voids (a void is defined as an empty flat awaiting allocation with no further redecorating or refurbishment required before it is occupied). The National Almshouse Association considers a 5% minimum void rate is acceptable and a void allowance of up to 12.5% may be suitable for small groups of almshouses, given the specific beneficiary group they serve. That would indicate that 4 to 9 of the Trust’s properties could be void at any one time.

During 2020 eleven vacancies arose (nine in 2019). Three properties were void for on average 2 months as a direct impact of the COVID-19 pandemic and the UK Government restrictions placed upon us all. This led to the Trust not being able to secure contractors to undertake these works during the initial lockdown period from March to June 2020. Once there was a gradual easing of lockdown restrictions, contractors were in high demand, yet we were able to carry out significant refurbishment, including replacing kitchens and bathrooms with these larger projects taking on average four-five weeks to complete. Despite the impact of the pandemic, the Trust was able to secure new residents immediately as it maintains a detailed application list of eligible local people in need who had been previously interviewed so that they could be offered vacant almshouses. In some cases, in flats where minimal work was needed, the turnaround in the flat getting it ready for the new resident was just one week.

Properties

In total there are 83 almshouses, and three units are occupied by two Resident Wardens and the House Manager. One almshouse for a resident warden was extended in 2019 to accommodate her young family leaving the Trust with 82 almshouse. However, as the post holder has now changed this extra space was no longer needed and has been converted back to the original almshouse. They are provided on three geographically separate sites within Tiverton, namely:

• (i) Greenway Gardens, King Street

• (ii) Slees, Angel Terrace

• (iii) John Greenway Close, Gold Street

The accommodation is designed for independent living, as residents get older, the Trust continues to support them for as long as possible and some residents receive third party care packages, social/community services assistance and support from the mental health team as required.

Tiverton Almshouse Trust owns the freehold of a number of commercial properties in the centre of Tiverton comprising retail and residential flats as well as two office buildings known as Raymond Penny House and John Greenway Building in the centre of town. The Trust also owns two terraced houses in Westexe, Tiverton.

2

REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

Going Concern

After a detailed review and examining major areas which could give rise to significant financial risk, the directors are satisfied that no material exposures exist other than as reflected in these Financial Statements and the Trust has adequate resources to continue its operations for the foreseeable future. The directors and management team review quarterly budgets with our external accountant, which include a minimum forecast 12-month period as well as a programme of works for 5 years. Cash liquidity is monitored through our updated summaries of cash and investments which the board review in detail at Property & Finance meetings 5 times a year and at the board meeting 4 times a year. We have also engaged an independent financial advisor from Stafford House Investments, Andrew Mayne, to produce an annual report to review all our investments in terms of risk. Tiverton Almshouse Trust is not dependent on investment income and market performance. We receive a steady income from commercial rents and weekly maintenance contributions from our almshouse residents, which meets our annual running costs. Large one-off projects regarding property development and/or significant repairs are reviewed against cash liquidity and available funds, which do not form part of the trusts permanent endowed fund. Five-year quinquennial inspections are carried out by Assinder Turnham on all our properties on a rolling programme, so we can plan for large expenditure required over coming years and factor into our budget.

The World Health Organisation (WHO) classed COVID-19 as a pandemic on 11 March 2020. Following that announcement, the Government in the UK introduced various measures to address the impact in the UK resulting in lockdown from 23 March 2020. Our sympathies continue to be with all those affected in any way by the virus. The UK continues to evolve in response to the challenges of COVID-19 and we continue to take proactive steps to ensure that we are well-positioned to respond.

The Trust took proactive measures as soon as the pandemic was announced. We introduced a new cloudbased IT system, that enabled all files to be accessed remotely by staff and directors through a secure portal. In order to ensure robust governance and to ensure board meetings could go ahead, staff and directors were supported to use remote video calling for meetings as social distancing prevented face to face meetings. The Trust reviewed its risk register regularly and introduced a new crisis policy was put in place so that all staff and directors were aware of the steps we were taking to respond to the pandemic and to keep the Trust running effectively, efficiently and safely. We also reviewed our budgets to assess our assumptions, look at any loss of income and to look at any potential risks or impact if for example, commercial units undergoing refurbishment were delayed in being leased.

Our office was closed to visitors and staff were supported with new computer equipment to be able to work remotely where necessary. We risk assessed our offices and housing sites, increased cleaning regimes, bought additional PPE for staff, sanitisers units for across the sites, closed our guest rooms and ceased our social events for residents.

Some works to residential flats and retail units being refurbished were delayed due to contractors having to stop work due to the lockdown and also delays in securing materials, this delayed us being able to move new tenants in by several months and therefore there was a loss of income that could have been achieved.

We contacted all our commercial tenants to find out the financial impact on their businesses throughout the lockdown, particularly those forced to close temporarily. We agreed flexible payment plans for those who were in immediate financial hardship and signposted all to government schemes for financial help which some were able to access throughout 2020. We reviewed our investments with our fund manager and took advice about the volatility of the investment market as there were some losses at the start of the pandemic which have been improving throughout the year for some of our investments.

Covid has impacted the year by some increased costs for staffing where staff were asked to work some additional hours to ensure the Trust was able to run smoothly, additional costs for equipment, cleaning and PPE resources, delays due to lockdown leading to a loss of some income for some vacant almshouses, residential and retail units that were in the middle of refurbishment work. The Trust has calculated additional costs for cleaning, equipment, PPE to be £6,780. At the end of the year all almshouses and retail units were full and all commercial tenants had paid their rents up to date.

Maintaining Properties

The Charity Commission Scheme clearly states that the main object of the charity is to provide almshouses for a specified group of local people. Income and capital must first be used to meet the proper costs of administering the charity and repairing, maintaining and insuring the buildings.

1. ACHIEVEMENTS AND PERFORMANCE

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Total expenditure (operating costs) decreased by £17,013 to 799,382 in 2020. 2019 included essential upgrade works to the residents’ Tunstall Emergency Call System primarily, which formed part of the utilities cost. Note 4 to the Financial Statements provides a comparison and more detail is provided below. In 2020, and in line with the quinquennial surveys, the Trust undertook a budgeted programme of works and cyclical maintenance.

All significant contracts for programmed works and significant repair works are put out to tender. The specification and contract administration (including tender administration and reporting) has been undertaken this year by Assinder Turnham, Chartered Surveyors. Minor routine maintenance is undertaken either by the Trust’s handyman or by one of an approved number of sub-contractors. Quotes are not required for work anticipated to be less than £3,000 to avoid inefficiency and wasted staff time and sub-contractor time. Subcontractors are required to breakdown labour and parts entries on invoices and, where possible, discounts for regular work are requested and often granted. All invoices are reviewed three times – by the Finance Administrator, Property Manager, and finally the Chief Executive before being approved by directors. At the end of the year all almshouse properties were occupied and all residential and commercial properties were occupied, apart from one retail unit, which was then leased in January 2021.

Maintenance of Almshouse Properties

Of the £799,382 total operating costs and interest payable in 2020 for all properties (investment properties and almshouses combined) £228,879 was spent on almshouse maintenance by way of programmed works, general redecoration and, where necessary redecoration and refurbishment of the eleven flats that became vacant. Within the programmed works are two rolling programmes, namely: boiler replacement and kitchen upgrades/bath replacement with showers at John Greenway Close and Greenway Gardens. Boiler replacement costs this year were £75,141 (2019: 25,130), bathroom and kitchen replacements were £80,853 (2019: £69,439).

Increased regulation means increased routine checks, which continue to present additional financial cost and staff time. The two most costly regulatory functions relate to legionella prevention and fire safety. The monthly, six-monthly and annual checks for monitoring water hygiene systems to reduce the risk of legionella cost the Trust £5,949 in 2020 (2019: £8,912). This reduction is a result of undertaking less remedial work than in the previous year.

To check fire detection systems the cost in 2020 was £5,498 (2019 £5,513) Where possible staff carry out routine checks but specialist services are more frequently required to fulfil legal obligations. The requirement to meet more robust guidance and regulations in buildings of differing ages and styles means the Trust is reliant on specialist contractors to carry out some of the works. Quotes are invited for this work and annual contracts awarded.

Residents’ Satisfaction

The Trust is committed to improving services and to understand what are the most important issues and priorities for our residents by gathering their valuable feedback. We carry out an annual residents’ satisfaction survey, results for 2020 are below compared to 2019 results.

Residents Satisfaction Survey	2020	2019
Satisfaction with overall service	95%	98%
Satisfaction with the overall quality of your home	93%	99%
Satisfaction of feeling safe living in your almshouse	100%	98%
Satisfaction that your weekly maintenance contribution provides value for money	94%	99%
Satisfaction that your utility contribution charge provides value for money	95%	99%
Satisfaction with repairs and maintenance	95%	96%
Satisfaction that Tiverton Almshouse Trust listen to your views and acts upon them	95%	84%

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The Trust joined a benchmarking group called Acuity 2018 to compare the annual costs of running the almshouse properties with similar almshouse charities and small housing associations across the country. Our level of residents’ satisfaction scores very favourably with other organisations. We sit just below the median for spend on reactive repairs and just above for cyclical and major repairs. We have invested in a bespoke property management system for the Trust and introduced cloud-based IT systems, which will help going forward in recording more detailed data for benchmarking.

Investment Property Maintenance

Expenditure on day-to-day maintenance on the Trust’s investment properties was significantly less than on almshouse properties, which is to be expected given the tenancy agreements on the former which oblige commercial tenants to keep properties in good and tenantable repair. In 2020 the routine and cyclical maintenance expenditure for the Trust on these properties was £60,173 (2019: £22,248), primarily consisting of servicing and general repairs and including the planned works.

Provision of Almshouse Accommodation

Tiverton Almshouse Trust is a social housing provider registered with, and regulated by, the Regulator of Social Housing (formerly the HCA). The Trust is also a registered charity and therefore regulated by the Charity Commission. The main purpose of the organisation is to provide housing to local people over 60 years of age and in financial need. Applications are encouraged from anyone who believes they fulfil the basic three criteria and are scrutinised in line with an internally approved policy which is regularly reviewed (at least every three years) to ensure consistency and relevance (see below).

Two out of our three sites have a Resident Warden. The third site, known as Slees, is a historic building in the town centre comprising three flats. Residents at Slees are not visited regularly by a Resident Warden but the House Manager will visit as necessary. This is because, in general, residents at Slees need to be mobile due to the restrictive historical layout.

The Resident Warden’s remit is to ensure the daily well-being of all residents and although they are not medically trained and do not provide personal care, they assist residents in day-to-day living. Their role can be described as “being a good neighbour”. There is a 24-hour emergency call system within Greenway Gardens and John Greenway Close enabling residents to access emergency help at all times of the day and night. The Resident Wardens maintain regular contact with family members when necessary and, in particular, when a resident is unwell. Resident Wardens also provide a variety of social activities where residents are invited, but are not obliged, to attend. These are held within the Community Room on the two main sites. With COVID restrictions in 2020, for residents and safety, group events have not been able to be held for the majority of the year.

Every six weeks there is a meeting on each of the main sites attended by appointed Directors of the Pastoral Sub-Committee, the Chief Executive, the House Manager and the Resident Warden to discuss management and resident issues. Directors on this committee are also responsible for interviewing new applicants and allocating vacant almshouses.

Residents pay a Weekly Maintenance Contribution for their accommodation and a contribution to water supply and gas (Utility Contribution). Weekly Maintenance Contributions (WMC) vary from £89 per week to £117 per week depending on the accommodation that is provided. In addition, all residents pay a £23.50 Utility Contribution based on single occupancy and £29.50 per week based on double occupancy. The Corporate Trustee aims to keep resident contributions as low as possible taking into account formulas provided by the Regulator of Social Housing (RSH) and equivalent fair rent assessments from the Valuation Office Agency (VOA). The latest VOA assessment was undertaken in November 2019. WMC was kept to £2 per week increase and there was no increase to the Utility Contributions. In addition, the Chief Executive consults with Mid Devon District Council on any WMC increase to ensure that those residents who require assistance can access 100% of the rent payment through housing benefit if eligible.

The Corporate Trustee strives to ensure a fair, consistent and transparent process when allocating almshouse accommodation. There is an approved policy within the Trust to advertise in the local newspaper, website if necessary, maintain regular contact with local organisations such as Age UK and the Churches Housing Action Trust (CHAT) as well as Devon Home Choice (the bidding portal for local authority housing and housing associations). Adverts are also placed in Mid Devon District Council’s reception. All applicants must complete a comprehensive application form including a financial information section and be interviewed by the appointed Directors and CEO. A points system is in used to ensure consistency. Those applicants placed on the list awaiting allocation are regularly reviewed and applicants are encouraged to keep in touch with the House Manager.

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A good working relationship with Mid Devon District Council and local housing charities ensures a wide- ranging local awareness of the almshouses as well as staff presentations by Zoom to local groups and articles in local papers. Innovative ways to widen the search for applicants are put in place and once an applicant is accepted in principle a priority weighting system ensures the applicant in greatest need is offered any vacancy first, in accordance with the Scheme.

The continuing lack of care homes within the town and surrounding means that residents are staying in their homes longer than in previous times. Social care support is now provided at home and hospital admissions generally reserved for emergencies, which means that care agencies and health professionals are frequently on site.

Alexandra Lodge

Planning permission was granted in 2015 to The Abbeyfield Society for the redevelopment of Alexandra Lodge, an empty listed house in gardens within the town, for a 45-bed extra-care unit. The freehold of the property is owned by Tiverton Almshouse Trust and, following planning permission, a 250-year lease was signed to The Abbeyfield Society. Since then, progress has been slow and due to financial issues Abbeyfield may not be able to continue with their plans for this site. Tiverton Almshouse Trust are in communications with Abbeyfield to see the options that they are pursuing to ensure the site is able at some point in the future to be developed by another organisation to ultimately benefit the people of Tiverton.

Relief of Financial Hardship

The additional objectives of the charity allow for the relief of poverty for local people who are in financial hardship by making grants of money to them or making grants to other organisations or institutions with similar aims. The amount of money donated to achieve this objective is considered by the Corporate Trustee at the AGM each year and the donation may be approved to a local organisation with similar aims. No donations were made in 2020.

FINANCIAL REVIEW

The Corporate Trustee reviews its reserves and, in particular the non-designated funds and expendable endowment to be used for “the proper costs of administering the charity and of managing its assets” (Charity Commission Scheme September 2009). A Reserves Policy addresses the Expendable Endowment and designates funds to the actions approved in the Five Year Strategy. There are regular reviews of operational risks and requirements, sufficient reserves are maintained in order to address these requirements.

Specifically, funds were set aside to refurbish existing residential and retail investment property in September 2019 and work was undertaken to produce a specification and complete a tender process for a refurbishment of this commercial and residential investment property. This work started in January 2020.

As stated in the Investment Policy, the objective of the Corporate Trustee in holding investments within a share portfolio is to produce the best financial return and capital growth within an acceptable risk and to balance the income and capital return.

The four risks identified in the report last year still stand, namely:

• i. Capital growth not keeping up with inflation thereby leading to a decline in the real value of the investment ii. Fluctuating income from share portfolios and deposit accounts due to COVID-19 pandemic iii. Bank default.

• iv. More topically, the unknown effect of the current Brexit negotiations is noted.

To limit the above risks the board has delegated certain decisions to the Property & Finance Sub-committee (which consists of over half of the board’s number) including allowing those members to re-invest maturing funds subject to the current Financial Services Compensation Scheme Limit. This allows decisions to take advantage of available investment offers (especially fixed rate bonds open for a short time) by acting in a timely manner. All investments, apart from those held within share portfolios, are monitored at every sub- committee meeting.

Shareholding portfolios are managed by professional brokers and/or fund managers and an annual review is undertaken at the November board meeting of the Corporate Trustee. An external investment review takes place annually.

The Corporate Trustee has considered ethical investments in line with ensuring that investments are not made into companies with opposite values from that of the Trust and has therefore put restrictions on investing in any

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fund that is linked to the production or sale of Tobacco.

It also considered companies who seek to make people homeless, however, this would be difficult to monitor and enforce. It was decided not to impose this ethical restriction. The Corporate Trustee accepts that the ethical values of individual directors must not compromise policy decisions.

The Statement of Comprehensive Income shows that income received from almshouse residents’ weekly contributions (including service charges) has increased by £10,022, primarily as a result of the annual review of charges in April. The Corporate Trustee is mindful of maximising income (for the charity’s future sustainability) commensurate with fulfilling the Charity Scheme objective to ensure no resident suffers financial hardship.

Operating costs (note 4) show some changes from the previous year. 2019 was the first time the Trust analysed costs related to social housing and investment properties and apportioned costs across the two areas. There has been an increase in the contracted management hours, but administrative wages and salary costs decreased in 2020 by £9,150, compared with 2019. Overall wage costs are up by £34,522 compared to 2019.

The income from fixed asset investments (shareholdings and deposits) decreased by £37,748 over the year mainly due to the volatile market caused by the COVID-19 pandemic. The managed portfolio is valued at £1,368,407 (2019: £1,303,606).

The annual total return on the managed portfolio is reflected in Note 12, with unrealised gains of £102,087 (2019: £316,219).

Last year directors decided not to reinvest the income from the managed portfolio but to receive it as dividends and interest. The impact of this decision can be seen in Note 12 where income reinvested has decreased from £63,739 in 2019 to £16,487 in 2020.

Rents receivable from investment properties have increased to £257,271, compared to the 2019 year (£254,903). At the year-end there was just one commercial void. A significant investment was made by the Trust to develop a large commercial property and 4 residential flats situated above, that had been leased by a larger retailer for the last 50 years. We submitted a dilapidation claim to this retailer at the end of their lease for £89,687, however the retailer has now gone into a Company Voluntary Arrangement, so unfortunately the external administrators have deemed that only £2,690 is eligible to be paid to us from this debt within the next 19 months, despite the significant investment the Trust had to make to bring the building and flats back into an acceptable standard for future tenants. £2,690 is included in current assets to reflect the money owed to the Trust.

Professional valuations are undertaken on a five-year rolling programme and this year took place on 2 – 16 Bampton Street, which increased in value by £80,000, from £1,420,000 to £1,500,000.

Informal valuations were undertaken by the corporate trustee in 2020 on the remaining almshouse and investment properties and kept at 2019 levels.

Permanent endowment (identified as investment properties, housing properties and other investments agreed as such by the Charity Commission as part of their investigations prior to the merger in 2009) has increased from £8.52m to £8.53m, reflecting, the unrealised gain on investments.

Other Reserves of £1,505,609 shown in the Statement of Financial Position are identified in note 17 and split into:

1. The Extraordinary Repair Fund (ERF) which allows for unforeseen expenditure necessary to carry out the Trust’s objectives.

2. Programmed Works are based on the five-year budget forecast, the quinquennial surveys and conditions surveys that are carried out for the Trust on a regular basis to ensure that there is a rolling programme of maintenance.

3. The Cyclical Maintenance fund reflects expenditure on work to maintain properties that is undertaken every so often on a regular, but not annual, basis, such as redecorating almshouses when a resident moves out.

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The mortgage debt for the 2004 development of thirty-two new almshouses at John Greenway Close remains the single largest financial commitment. The financial statements show the annual interest payment for the year £12,396 and reduction in the value of the outstanding mortgage of from £643,035 (2019) to £611,811 in 2020.

The mortgage is held in two separate accounts, one fixed until 2022 and one variable allowing just over half of the sum owing to be paid off at any time should directors deem prudent to do so.

4.

PLANS FOR THE FUTURE

A five-year plan (2017-2022) has been approved by Directors. In summary the aim within that plan over the five-year timescale is to:

• i. Improve/adapt housing to enable residents to stay as almshouse residents for as long as possible.

• ii. Improve warden services to enable residents to stay as long as possible.

• iii. Work with third parties to assist in providing the next step for residents requiring greater care.

• iv. To improve public awareness of the Trust, including awareness within local organisations.

• v. To investigate the provision of new almshouses where the opportunity arises.

• vi. To ensure all commercial properties are fully let and updated where necessary for new tenants.

The five-year plan translated into the following annual plan and achievements for 2020:

• i. To refurbish the bathrooms within vacant ground floor flats at John Greenway Close to shower rooms. It was decided to include refurbishment of all vacant units whether ground or first floor.

• ii. To investigate the provision of greater support for residents (through telecare, midday meals). The replacement of the Tunstall emergency call system took place in 2019.

• iii. Tender process was implemented for the refurbishment of one vacant commercial property and 4 residential flats above it. Work was completed in 2020.

• iv. A review of accounting software and IT systems was undertaken, and new more efficient systems introduced.

• v. During the consideration of the Reserves Policy, Directors decided to widen the search for a redevelopment opportunity for additional almshouses and this was a focus for 2020, with options being investigated.

• vi. To undertake talks, advertising, greater social media reach and closer liaison with the local community, local groups and Mid Devon District Council with a view to increasing the awareness of the Trust in providing homes for local older people in need, good progress has been made on this objective.

5. CHARITY STRUCTURE, GOVERNANCE AND MANAGEMENT

Tiverton Almshouse Trust is regulated by The Charity Commission and the Regulator of Social Housing (formerly the HCA). Under the latter, it is classed as a Registered Provider of social housing. In 2014 a new Charity Commission Scheme changed the way the Trust was governed. Tiverton Almshouse Trust is a registered charity with the objects outlined above (see section 1). The 2014 Scheme gave permission for the charity to have one corporate trustee rather than twelve individual trustees and, as a result, a new company limited by guarantee known as Tiverton Almshouse Trustee Ltd was established to be that sole trustee.

Within the company (the corporate trustee) are the twelve voluntary directors (previously called trustees). The Tiverton Almshouse Trust Scheme provides the corporate trustee with the same powers as before and the Articles of Association provide further provisions. The incorporated structure is more recognisable to banking and commercial sectors and provides directors with increased indemnity protection.

The directors have a term of appointment of five years . directors can be re-appointed and there is no maximum number of terms for re-appointment. Instead, directors due for retirement on the rotation basis are interviewed by the Recruitment Sub-committee under an agreed procedure which remains the same for all directors.

A set series of seven questions probing the interviewee’s commitment to the charity and its purpose, the time available for the necessary workload, the skills that can be brought to the board and the individual’s hopes and aspirations for the charity for the next five years are all discussed in depth and reported back to the board at the AGM when re-appointments are decided. In this way the board can retain committed and energetic directors regardless of their length of term.

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Prior to appointment and re-appointment directors must sign the Charity Commission’s Declaration of Eligibility to serve. At each meeting of the board and the sub-committees, all potential, real and perceived conflicts of interest, loyalty and perception are declared, recorded and discussed. In the event of a conflict or likelihood of a conflict the director in question is asked to leave the room at the appropriate time or refrains from voting on the matter in question.

There are currently the eleven of the full twelve permitted directors under the Articles of Association. The board considers that it has the necessary skills and attributes without actively seeking an additional director. The internal audit of the board takes place at the AGM in May.

Directors

Directors
Name	Position	Date appointed/resigned	Skills and experience
John A Pulford	Chairman	Reappointed 14 May 2019	Retired Local Government Officer
Brenda Stanley	Director	Reappointed 5 May 2019	Retired Businesswoman
Alison W Maunder	Director	Reappointed 8 May 2018	Retired volunteer Age UK, retired Nurse.
Michael H C Biggin	Director	Reappointed 3 May 2019	Retired Finance Manager
John N Rendle	Director	Reappointed 8 May 2018	Businessman
Janice A Hutchinson	Director	Reappointed 9 May 2017	Retired Teaching Assistant
David H Hamer	Director	Reappointed 14 May 2019	Retired Chaplain
Robert J Cumes	Director	Reappointed 3 May 2016	Retired Operations Manager
Victoria Burston	Director	Appointed 14 May 2019	Business Owner
Susan Hollins	Director	Resigned 7 July 2020	Counsellor
Nominated directors appointed by Tiverton Town Council:
Wallace Burke	Director	Re-nominated 14 May 2019	Town Councillor
Claudette Harrower	Director	Re-nominated 14 May 2019	Town Councillor

Office of the Trust

The office of the Tiverton Almshouse Trust is: The Market House, 18 Bampton Street, Tiverton, Devon EX16 6AA.

Trust Staff

Trust Staff
D Woodward	Chief Executive
A Parkins	Property Manager
N Anderson	Finance Administrator (Appointed 21stSeptember 2020)
L Brooks	House Manager
H Evans	Secretary/Receptionist
G Strong	Handyman/Gardener
M Pike	Cleaner
Resident Wardens
L Pearce	Resident Warden, John Greenway Close
E.Kerrigan	Resident Warden, Greenway Gardens (Appointed 26thOctober 2020)

Advisors to the Trust
Auditors:	PKF Francis Clark, Centenary House, Exeter, Devon
Accountants:	William Withers & Co., Quayside House, Tiverton, Devon
Bankers:	Unity Trust Bank, 9 Brindley Place, Birmingham
Solicitors:	Ashfords, Gotham House, Tiverton, Devon
Investment advisors:	Investec Wealth & Investment, Keble House, Southernhay Gardens,
Exeter Commercial surveyors:	Mettam Ware, 15A Fore Street, Tiverton and Stratton Creber, 20
	Southernhay West, Exeter
Property Surveyors:	Assinder Turnham, 6/7 Southernhay West, Exeter

Structure of the Trustee’s Board of Directors

The board of directors comprises an elected chairman and vice-chairman who are voted a year of office at the AGM held every May. The board of directors meets quarterly each year at the Trust’s offices.

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In addition, there are four sub-committees:

1. Property & Finance which meets every six weeks

2. Pastoral (an executive committee) which meets every six weeks

3. Policy which meets as necessary and not less than twice per year (in practice every two months)

4. Recruitment which meets between November and May each year prior to the retirement by rotation at the AGM and as necessary when a director vacancy arises.

Board meetings are held four times each year with an AGM in May. No business may be transacted at a board meeting unless four directors are present as a quorum.

Following the incorporation, directors approved a governance policy covering the way business is transacted within the sub-committees and within the main board in line with the Articles of Association. The governance policy was revised in 2018.

Director Vacancies

Vacancies for nominated directors are filled by Tiverton Town Council held in accordance with the ordinary practice of the Town Council. They elect two councillors as their representatives on the Trust’s board and the term is for four years.

The Articles allow for retirement by rotation meaning that at each AGM one-fifth of the elected directors retire from office. Retiring directors can re-apply for another term and will be asked to meet with the Recruitment SubCommittee prior to the AGM to discuss their application (see above and below).

The approved policy for recruiting new directors is to advertise following a skills audit of the board and includes provisions for appointment, declarations and managing conflicts of interest/loyalty.

Once appointed, the new director is encouraged to visit all the almshouse sites (if they have not already done so) accompanied by the CEO, house manager or a member of the office staff. In addition, the new director is invited to sit as an observer on all sub-committee meetings for a period of at least six months to enable them to become familiar with workings of the Trust and the day-to-day issues. After the six-month induction, the new director is encouraged to participate within one or more sub-committees when appointments are made at the AGM.

Appointment and Training of staff

Members of staff are appointed in accordance with the approved policy. Remuneration of all staff is reviewed on an annual basis in April and increases are based upon a comparison with public sector and private sector pay settlements. When available more specific comparisons are made with other almshouse or housing charities of the same size and operation.

A rolling programme of training is operated including fire procedures, health and safety risk assessments, food hygiene, first-aid, working at height, safeguarding, lone-working, mental health awareness and data protection. The Almshouse Association provides the most relevant and practical forum for directors and staff training.

Applying the Charities Code of Governance 2017

The corporate trustee has considered, in detail, the best practice guidelines within the Code. There is an obligation upon charities to apply the Code or explain why they have not. Whilst the overwhelming majority of markers have been met there are some which are in the process of being more fully integrated such as (benchmarking). The corporate trustee has also reviewed the changes made to the code in December 2020 and they will continue to apply this code going forward.

Some guidelines are not applied for good reason. Contracts with local sub-contractors undertaking small-scale routine maintenance work are kept as verbal contracts in the interest of speed, efficiency and experience of comparative costs.

Regarding director appointments, the corporate trustee considers that a restriction on length of term would not be in the best interest of the organisation for the following reasons:

• i. There is a robust written procedure on trustee appointments that takes a pragmatic view of the size of Tiverton and the availability of volunteer directors.

• ii. Each director has a peer review at the end of their term with set questions relating to the skills, time and level of commitment they can give to the Trust. Responses are considered by the Recruitment

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Sub-Committee (which consists of different members each year) and a recommendation is made to the Board at the AGM.

• iii. Past experience has shown that professionals appointed as directors can lead to conflicts of interest and loyalty given the size of the town.

• iv.

• Consistency and local knowledge are highly valued by directors.

• v. Directors consider that it is not the length of term but the added value and input a director can give to the Trust that is important.

• vi. In the event of a vacancy, directors would be willing to be flexible and adapt current meeting arrangements in order to ensure a diverse board.

Applying the Value for Money Standard 2018

Tiverton Almshouse Trust is a registered social provider and, as such, published annual evidence within these statutory accounts to enable stakeholders to understand our performance as compared with the metrics set out by the regulator, compare those to our peer group and address any areas of underperformance.

Tiverton Almshouse Trust has recently joined Acuity Benchmarking Group for small social housing providers and our second annual benchmarking report has recently been submitted. Improvements we have made in collecting and collating our data this year has increased the accuracy of the submitted figures.

The Trust scored very highly in terms of resident satisfaction and repairs performance. Our management of voids, regarding costs and the time to turn these around, were at the lower end of the median but it was clear that there were some differences in how organisations accounted for this element of the process.

Our WMC collection and arrears were below the average and our sickness absence figures were the lowest within the group. Our weekly spend per property is in line with similar costs across comparable organisations.

The Trusts repairs and maintenance costs are above the average in some cases as are our overheads but when considered as a proportion of our turnover, it returns the Trust to the median line. Management costs have increased due to having new staff in a new post and higher qualified staff in another. Further, improved reporting on staff recording work related to Almshouses has also contributed to the increase.

Our Major and Cyclical works are high compared to other organisations in part due which type of services are consider Cyclical by different organisations; the Trust has recorded the Tunstall emergency call system as cyclical for example.

The standard refers to activities across the board and includes activities relating to the Trust’s investment properties where relevant.

There are seven metrics within the standard:

1. Reinvestment (the scale of investment into existing housing, acquisition or development of new housing in relation to the size of the asset base). This metric looks at the investment in properties as a percentage of the value of total properties held. The Trust did not acquire or develop any new housing in 2020 and currently operates 83 social housing units. The measure for The Trust in 2020 is 5.67% (2019: 5.91%). In both years the expenditure on existing properties has been a combination of programmed refurbishments of bathrooms to shower rooms and a rolling programme replacing boilers. The section on Maintenance of Almshouses contains further detail.

2. New supply delivered (units acquired or developed in the year as a proportion of existing housing stock). Given there were no additional units acquired the measure is zero.

3. Gearing (Proportion of borrowing in relation to the size of the asset base). The Trust’s borrowing relates to a mortgage taken out when the 2004 new development of 32 houses was built. The loan is valued at £611,811 at 31 December 2020 representing a gearing of 15.14% (2019: 15.92%). The board is not proposing to take on any further loans in 2021 and reviews annually the financial benefits of paying off part of the mortgage that is unfixed versus the interest and return on investments.

4. Earnings before interest, tax, depreciation and amortisation major repairs included (Indicates liquidity and investment capacity). The EBITDA MRI interest cover seeks to measure the level of surplus that is generated compared to interest payable. The Trust’s measure for 2020 is 113.62% (or 1.136 times).

11

REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

1. Social housing cost per unit The Trust’s social housing cost per unit for 2020 was £2,937, (2019 £2,690) the applicable costs related to management, repairs and maintenance and service costs which was higher in 2020 due to works to replacing boilers, kitchens, bathrooms and upgrading works.

2. A Operating Margin % (Social Housing Lettings Only) demonstrates the profitability of operating assets before exceptional expenses are taken into account. In calculating this only operating costs directly attributable to social housing costs have been included, the margin for the Trust for 2020 was 17.21% (2019: 20%).

3. B Operating Margin % (Overall) as above however including all operating costs against social housing income and rents receivable from investment properties the margin for the Trust for 2020 was -2.32% (2019: 5%). Although the Trust’s total expenditure (note 4) has decreased compared to 2019, the 2019 calculation included an adjustment for various exceptional costs (totalling £100,434). 2020 has seen an increase in some specific costs areas, partly as a result of COVID-19, as well as changes in staffing, resulting in a lower margin this year.

4. Return on capital employed % (ROCE) the metric compares the operating surplus to total assets less current liabilities, the Trust’s ROCE for 2020 was 0.13% (2019: 1.34%).

Managing Risk

The Corporate Trustee regularly reviews the potential risks to the Association and aims to take a balanced and proportionate view. Professional advice is taken where necessary and regularly.

Where decisions are taken to commit significant financial resources, the financial return is considered along with the social investment return and the furtherance of the charitable objectives.

Nevertheless, the corporate trustee is acutely aware of the potential risks facing the Trust and a rigorous system of checks and balances is in place and reviewed regularly. A detailed risk register serves to prioritise governance, operational, compliance and external factors that pose the greatest concern and a management plan is enforced to reduce exposure. Greatest risks can be grouped according to residual risk priority and summarised as follows in order of concern:

• i. Regulatory and Statutory

• a. Changes in government policy leading to reduced income, increased regulation and therefore increased expense and staff time.

• b. Maximising the positive impact upon beneficiaries but ensuring this is within the parameters of the Charity’s objects.

• c. Governance matters that arise from a small staff team (such as dependence on key staff).

• d. Recognising the potential for conflicting interests and loyalties given the directors within the corporate trustee are local lay people with numerous local connections and local businesses.

• e. Reducing the possibility of unknown changes in legislation and regulation (sometimes originating in indirect departments).

• ii. Specific risk mitigation measures relevant to the Financial Statement:

• a. Fraud: Day-to-day administration procedures are undertaken to reduce the risk of fraud and certain functions (such as payroll) are outsourced. An external financial review was undertaken in 2019 as good practice and also a new Fraud Policy and Fraud Response Plan was implemented to the robust list of policies and procedures already in place.

• b. Loss of Income (Property): Measures are taken to minimise almshouse voids (see report above) by advertising and maintaining close working relationships with local organisations and the local authority. Commercial rent levels have dropped considerably in recent years due to the uncertain economic climate preceded by a recession, but staff strive to ensure good working relationships with commercial tenants, keep the properties in good working order and keep close monitoring of rental payments to minimise the risk of arrears and to maintain continuity of tenants.

• c. Loss of Income (other assets): An annual investment review is held every November and monitored every six weeks by the Property & Finance Sub-Committee. An approved Investment Policy is reviewed every three years. Discretionary power has been given to the Trust’s brokers who manage the largest portfolio, other investment providers are managed funds or deposit accounts. The corporate trustee aims for a wide variety of deposit accounts balancing long term and short-term investments and, as far as reasonably possible, invests no more than the maximum cover provided by the Financial Services Compensation

12

REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

Scheme.

• d. Unforeseen Property Repair Costs: Quinquennial surveys are commissioned, and the results incorporated into a rolling programme of maintenance within the budget forecast. Unforeseen works are therefore restricted to extraordinary events (such as flooding as a result of a leak) and usually covered by insurance. Routine maintenance is seen as a core activity.

The chief executive is responsible for the day-to-day management of health and safety matters and directors are also aware of their statutory duties under legislation through regular sub-committees. Risk assessments are carried out annually by the property manager/chief executive and regularly updated throughout the year in a working file. Fire risk assessments are carried out annually by the property manager/chief executive and every three years professionally.

A comprehensive list of policies and procedures is reviewed on a one - three-year rolling programme or as a result of changing legislation or best practice guideline, whichever is the soonest. Regular staff meetings ensure that new procedures are implemented.

Meetings with residents are held annually where matters of health and safety are discussed and reinforced, including the procedure in the event of a fire. A fire drill is held annually.

Residents are encouraged to ask questions and provide feedback verbally, or in writing or thorough our suggestion boxes on site. Once a year, the chief executive meets with all residents to discuss the next year’s draft annual plan, as well as the results from the residents’ satisfaction survey. Staff meetings for office employees, including line managers happen as frequently as possible.

Directors and staff remain vigilant on matters of risk and continue to seek advice and updates from legal bodies, the Charity Commission, the Social Housing Regulator and the Almshouse Association.

Impacts of COVID-19

2020 was the year, none of us could have expected with a global pandemic bringing a profound change to how we would all live and work and interact as a community. This resulted in residents not being able to see their families, our resident events and activities put on hold. Many of our residents would be considered to be high risk to COVID-19 because of their age, underlying health conditions and because of the drastic changes to their external support networks in the community that had to close or remain restricted.

Operationally, this meant that it was necessary to implement a number of significant changes which included some staff working remotely from home, residents being contacted by their wardens by phone only and staff and director meetings being by virtual Zoom videos. The Trust risk register was updated to consider all areas of potential risk from the pandemic, both operationally and strategically.

The Trust responded proactively to the COVID-19 pandemic, with our robust risk assessments already embedded in the Trust and put in place all additional measures on top of what we normally provide to keep residents and staff safe and well. Staff were supported with additional computer equipment to work remotely and appropriate PPE. All safety checks continued in relation to fire and legionella. Urgent repairs continued with strict safety measure. The impact for the Trust was loss of some income during lockdown we could not get contractors in to carry out work to flats that became vacant and additional costs for PPE, sanitiser units, equipment. The staff team at the Trust worked tirelessly to adapt to each unprecedented change due to the pandemic and to ensuring residents safety and well-being remained, as always, our priority and focus.

Commercial tenants were supported with flexible payment plans to help them when their retail businesses had to close due to Government restrictions and these payments have now been brought up to date. Our investment portfolio saw some losses due to the volatility of the market due to the pandemic.

13

REPORT OF THE CORPORATE TRUSTEE YEAR ENDED 31 DECEMBER 2020

STATEMENT OF DISCLOSURE OF INFORMATION TO AUDITORS

The corporate trustee of the charity which held office at the date of approval of these Financial Statements as set out above, confirms, so far as it is aware, that:

• there is no relevant audit information of which the charity’s auditors are unaware; and

• it has taken all the steps that it ought to have taken as corporate trustee in order to make itself aware of any relevant audit information and to establish that the charity’s auditors are aware of that information.

Approved at a meeting of the corporate trustee held on 11 May 2021

Signed on its behalf by:

Mr J Pulford – Director (Chairman)

Mr R Cumes – Director (Vice-chair)

Mrs D Woodward (Chief Executive)

14

TIVERTON ALMSHOUSE TRUST STATEMENT ON INTERNAL CONTROL SYSTEMS YEAR ENDED 31 DECEMBER 2020

The corporate trustee is responsible for maintaining a sound system of internal control which:

• focuses on the significant risks that threaten the organisation’s ability to meet its objectives; and

• provides reasonable assurance of the safeguarding of assets.

The corporate trustee is also responsible for reviewing the effectiveness of the system of internal control.

The internal control system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable, and not absolute, assurance against material misstatement or loss.

The process for identifying, evaluating and managing the significant risks faced by the charity is ongoing. This process has been in place for the year ended 31 December 2020 and up to the date of approval of the corporate trustee’s report and financial statements and is regularly reviewed by the corporate trustee.

Experienced and suitably qualified management staff take responsibility for important business functions. Appraisal procedures have been established to maintain the standards of performance.

All significant new initiatives, major investments and investment projects are subject to formal authorisation procedures, through the Property and Finance Sub Committee and/or the board.

The Property and Finance Sub Committee reviews reports from senior staff on behalf of the Board and from the external Accountants and separate Auditors to provide assurance that control procedures are in place and are being followed. The Property and Finance Sub Committee informs the Board in this regard on a regular basis.

Procedures have been established for instituting appropriate action to correct weaknesses identified from the above report.

15

TIVERTON ALMSHOUSE TRUST CORPORATE TRUSTEES’ RESPONSIBILITIES STATEMENT YEAR ENDED 31 DECEMBER 2020

The Charities Act 2011 and registered social housing legislation require the corporate trustee 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 its income and expenditure for that period.

In preparing these financial statements, the corporate trustee is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements 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 corporate trustee is responsible for keeping proper accounting records which 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 Housing and Regeneration Act 2008 and the Accounting Direction for private registered providers of social housing in England 2019. The corporate trustee has general responsibility for taking reasonable steps to safeguard the assets of the Trust and to prevent and detect fraud and other irregularities.

16

INDEPENDENT AUDITOR’S REPORT TO THE CORPORATE TRUSTEE OF TIVERTON ALMSHOUSE TRUST

Opinion

We have audited the financial statements of Tiverton Almshouse Trust for the year ended 31 December 2020 which comprise the Statement of comprehensive income (including income and expenditure account), Statement of financial position, Statement of changes in equity and reserves, Statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the Charity’s affairs as at 31 December 2020 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

• and have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been properly prepared in accordance with the Charities Act 2011, the Housing and Regeneration Act 2008 and the Accounting Direction for private registered providers of social housing in England 2019.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The corporate trustee is responsible for the other information. The other information comprises the information included in the report of the corporate trustee, 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

17

INDEPENDENT AUDITOR’S REPORT TO THE CORPORATE TRUSTEE OF TIVERTON ALMSHOUSE TRUST (CONTINUED)

Opinion on other matter prescribed by the Charities Act 2011

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the Trustees’ Report has been prepared in accordance with applicable legal requirements.

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 requires us to report to you if, in our opinion:

• the information given in the corporate trustee’s report is inconsistent in any material respect with the financial statements; or

• sufficient accounting records have not been kept; or

• the financial statements are not in agreement with the accounting records; or

• we have not received all the information and explanations we require for our audit.

In addition, we have nothing to report in respect of the following matter where the Housing and Regeneration Act 2008 requires us to report to you if, in our opinion:

• a satisfactory system of control over transactions has not been maintained.

Responsibilities of corporate trustee

As explained more fully in the Corporate Trustee’s Responsibilities Statement (set out on page 16), the corporate trustee is 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 Corporate trustee 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 corporate trustee is 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 corporate trustee either intends to liquidate the charity or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

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

Based on our understanding of the Trust and nature of the business, we identified the principal risks of noncompliance with laws and regulations as being those which have a direct impact on the preparation of the financial statements, such as The Charities Act 2006, and relevant tax legislation (VAT etc.), as well as legislation governing responsibilities as a social housing landlord. We considered the extent to which noncompliance with these laws and regulations may have a material effect on the financial statements.

18

INDEPENDENT AUDITOR’S REPORT TO THE CORPORATE TRUSTEE OF TIVERTON ALMSHOUSE TRUST (CONTINUED)

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

Based on this understanding we designed our audit procedures to identify irregularities. Our procedures involved the following:

• Enquiries of those charged with governance, regarding their knowledge of any non-compliance or potential non-compliance with laws and regulations that could affect the financial statements;

• Review of minutes of meetings of those charged with governance;

• Evaluation of the effectiveness of management’s controls designed to prevent and detect irregularities including those applicable to social housing landlords;

• Challenging assumptions and judgements made by management in its significant accounting estimates;

• Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to become aware of instances of non-compliance. 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, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the Charity’s corporate trustee, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008 and section 137 of the Housing and Regeneration Act 2008. Our audit work has been undertaken so that we might state to the Charity’s corporate trustee those matters we are required to state to the corporate trustee 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’s corporate trustee as a body, for our audit work, for this report, or for the opinions we have formed.

PKF Francis Clark , Statutory Auditor

Centenary House Peninsula Park Rydon Lane Exeter EX2 7XE Date: 14 May 2021

PKF Francis Clark is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

19

TIVERTON ALMSHOUSE TRUST STATEMENT OF COMPREHENSIVE INCOME (INCLUDING INCOME AND EXPENDITURE ACCOUNT) YEAR ENDED 31 DECEMBER 2020

			As restated
	Note	2020	2019
		£	£
Turnover	2	769,178	756,788
Less: Operating costs	4	786,986	801,889
Operating deficit	5	(17,808)	(45,101)
Income from fixed asset investments		30,491	68,239
Interest receivable and similar income	9	14,263	144,169
Interest payable and similar charges	10	(12,396)	(14,506)
Unrealised/realised gains and losses on investments	12	102,087	316,219
Revaluation of investment properties		80,000	-
Surplus on ordinary activities for the year before tax		196,637	469,020
Tax on surplus on ordinary activities		-	-
Surplus / (deficit) for the year after tax		196,637	469,020
Revaluation of tangible fixed assets		-	55,000
Total comprehensive income for the year		196,637	524,020

Signed on behalf of the corporate trustee on 11 May 2021

Mr J Pulford – Director (Chairman)

Mr R Cumes – Director (Vice-chair)

The annexed notes form part of these financial statements.

20

TIVERTON ALMSHOUSE TRUST STATEMENT OF FINANCIAL POSITION YEAR ENDED 31 DECEMBER 2020

Notes Fixed assets Tangible fixed assets 11 Investment properties 11 Other fixed assets 11 Investments 12 Current assets Debtors 13 Cash at bank and in hand Creditors: amounts falling due within one year 14 Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year 15 Capital and reserves Permanent endowment 18 Expendable endowment 18 Income and Expenditure reserves 17	2020 £ £ 4,040,000 2,863,414 427,240 3,359,604 10,690,258 49,235 969,601 1,018,836 110,196 908,640 11,598,898 580,009 11,018,889 8,610,142 903,138 1,505,609 11,018,889	2019 £ £ 4,040,000 2,877,500 76,503 3,250,522 10,244,525 31,024 1,275,981 1,307,005 116,242 1,190,763 11,435,288 613,035 10,822,253 8,529,000 865,209 1,428,044 10,822,253	2019 £ £ 4,040,000 2,877,500 76,503 3,250,522 10,244,525 31,024 1,275,981 1,307,005 116,242 1,190,763 11,435,288 613,035 10,822,253 8,529,000 865,209 1,428,044 10,822,253
			10,244,525 1,190,763 11,435,288 613,035 10,822,253
	1,018,836 110,196	1,307,005 116,242
			8,529,000 865,209 1,428,044
			10,822,253

These financial statements were approved and authorised for issue by the corporate trustee on 11 May 2021

and signed on its behalf by:

Mr J Pulford - Director

Mr R Cumes - Director

The annexed notes form part of these financial statements.

21

TIVERTON ALMSHOUSE TRUST STATEMENT OF CHANGES IN EQUITY AND RESERVES YEAR ENDED 31 DECEMBER 2020

At 31 December 2019 Surplus for year before gains and losses from investments Unrealised/realised gains and losses on investments Revaluation of tangible fixed assets Total comprehensive income Transfers At 31 December 2020	Permanent Expendable Other Endowment Endowment Reserves Total £ £ £ £ 8,529,000 865,209 1,428,044 10,822,253 - - 14,550 14,550 1,142 37,929 63,015 102,086 80,000 - - 80,000 81,142 37,929 63,015 196,636 - - - - 8,610,142 903,138 1,505,609 11,018,889	2019 £ 10,298,333
		152,801 316,219 55,000
		524,020
		-
		10,822,253

The annexed notes form part of these financial statements.

22

TIVERTON ALMSHOUSE TRUST STATEMENT OF CASHFLOWS YEAR ENDED 31 DECEMBER 2020

Note Net cash flow from operating activities 24 Cash flow from investing activities Rents received from investment properties Payments to acquire tangible fixed assets Receipts from sales of tangible fixed assets Payments to acquire investments Proceeds from sale of investments Purchase of investments Interest received Dividends received Net cash flow from investing activities Cash flow from financing activities Repayment of long term loans Net cash flow from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents as at 1 January 2020 Cash and cash equivalents as at 31 December 2020 Cash and cash equivalents consist of: Cash at bank and in hand Cash held as part of investment portfolio	2020 £ (295,841) 257,271 (259,258) - - 8,517 (278,748) 11,573 30,491 (230,154) (43,620) (43,620) (569,615) 1,561,112 991,497 969,601 21,896 991,497	2019 £ (359,772) 254,903 (2,254) - - 929,612 (665,694) 26,039 68,239
		610,845 (44,434)
		(44,434) 206,639 1,354,473
		1,561,112
		1,275,981 285,131
		1,561,112

The annexed notes form part of these financial statements.

23

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General information and basis of preparation

Tiverton Almshouse Trust is incorporated under the Charities Act 2011 and is a Registered Provider of Social Housing in the United Kingdom.

Tiverton Almshouse Trust constitutes a public benefit entity as defined by FRS 102.

The financial statements have been prepared in accordance with applicable accounting standards including Financial Reporting Standard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102), the Statement of Recommended Practice for Social Housing Providers 2018, and with the Accounting Direction for private registered providers of social housing in England 2019, and the Charities Act 2011.

The financial statements are prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value.

The financial statements are prepared in sterling, which is the functional currency of Tiverton Almshouse Trust and rounded to the nearest £.

The registered office is disclosed in the Report of the Corporate Trustee.

Housing properties

Housing properties are principally properties available to beneficiaries of the trust in return for weekly maintenance contributions.

Housing properties are included at deemed cost and are reviewed for impairment at the end of each reporting period.

Investment Properties

Investment properties are principally properties available to tenants of the trust in return for a commercial rent.

Investment properties are included at valuation, representing fair value and at each reporting date any changes in fair value are recognised in the statement of comprehensive income. Professional valuations are undertaken on a 5-year rolling cycle.

Investment properties are reviewed for impairment at the end of each reporting period.

24

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

Fixed assets and Depreciation

Other fixed assets are stated at cost, less accumulated depreciation. Depreciation is charged on a straight-line basis at rates anticipated to write off the cost of the asset, at the following annual rates:

Housing properties Nil Freehold property Nil Computer equipment 33.33%

There is no depreciation charged this year against housing properties or freehold property as the corporate trustee believes the residual values are not lower than the current carrying value in the balance sheet. This opinion is based on the valuation of The Market House offices in 2018 and the valuation work down on the housing properties in 2019. It is the corporate trustee’s opinion that the local housing market remained static over the 2020 year, and they will be reviewing this throughout the 2021 financial year.

Investments

Investments are recognised initially at fair value which is normally the transaction price excluding transaction costs. Subsequently they are measured at fair value through the statement of comprehensive income.

Debtors and creditors receivable/payable within one year Debtors and creditors payable within one year are recorded at transaction price.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs and then subsequently adjusted for principal repayments and interest charged.

Revaluation surpluses and deficits

Where market value is not readily available, the Corporate trustee estimates market value. Revaluations of investments are reported in the Statement of Comprehensive Income.

Leased Assets

Rentals payable under operating leases are charged to the income and expenditure account on a straight-line basis over the period of the lease.

Government grants

A social housing grant was received back in 2004 as a contribution towards the capital cost. The grant was previously deducted from the cost of the housing properties. However, as the housing properties are accounted for using the valuation model, grants should now be accounted for using the performance model which means that grants are recognised as income once the performance conditions have been meet. This change has not altered the overall value of reserves.

Current Taxation

No taxation is payable by the charity, since it has charitable status and its activities are exempt from tax.

Value Added Tax

Irrecoverable VAT which can be attributed to capital items or revenue expenditure is added to the cost of the capital item or expenses where practicable and material.

Pension Costs

The charity operates a defined contribution scheme for the benefit of its employees. The costs of contributions are written off through the income and expenditure account in the year they are payable.

Dilapidations

Monies receivable in respect of dilapidations are generally not accounted for until they can be determined with reasonable accuracy.

25

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

Turnover

Turnover is measured at the fair value of the consideration received or receivable.

Turnover represents rental and service charges income receivable in the year net of rent and service charge losses from almshouse voids.

Interest and dividends receivable

Interest and dividend income is recognised as Tiverton Almshouse Trust’s right to receive payment is established.

Key judgements and estimates

The following judgements and estimates have been made in the process of applying the above accounting policies that have had the most significant effect on amounts recognised in the financial statements:

The corporate trustee has established a five-year cycle for investment properties to be valued by an external RICS qualified surveyor. In the intervening years the remaining properties are valued by the corporate trustee having regard to all risks, the yield, the strength of the market and comparison with similar properties.

Reclassification of comparative Statement of Comprehensive Income

Comparatives in respect of investment property income and expenditure, as well as gains on investments have been restated to ensure they are correctly disclosed in the financial statements in line with FRS 102.

• 2 TURNOVER

3		2020	2019
		£	£
	Rents receivable excluding service charges	420,589	408,916
	Service charges receivable	99,632	100,016
	Rent and service charge losses from voids	(8,554)	(9,662)
	Guest room income	240	2,615
	Social Housing Turnover	511,907	501,885
	Investmentpropertyincome	257,271	254,903
		769,178	756,788
	UNITS IN MANAGEMENT
		2020	2019
	Social housing for older people	83	82
	Warden accommodation	3	4
		86	86

26

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

4 OPERATING COSTS

4 OPERATING COSTS
	Support	Social	Investment		Tl 2020	Total
	Costs	Housing	Properties		ota	2019
	£	£	£		£	£
Estate management costs:
Wages and salaries	-	39,882	59,823		99,705	56,033
Estate costs
Repairs and maintenance	-	228,879	30,964		259,843	260,846
Professional fees	-	24,769	31,613		56,382	10,497
Utilities	-	95,235	18,189		113,424	167,480
Insurance	-	20,160	5,012		25,172	12,857
Sundry expenses	360	3,546	1,971		5,877	5,168
Waste	355	6,182	650		7,187
Cleaning	673	5,163	2,078		7,914
Bad debt	-	-	-		-	1,251
Administrative costs
Wages and salaries	154,879	-	-		154,879	164,029
Staff recruitment costs	-	-	-		-	15,575
Office running costs	23,030	-	-		23,030	31,559
Accountancy and audit fees	17,541	-	-		17,541	14,615
Professional fees	-	-	-		-	36,686
PI insurance	578	-	-		578	578
Subscriptions	2,295	-	-		2,295	2,340
Bank charges	1,060	-	-		1,060	862
Donations	-	-	-		-	10,000
Depreciation	2,607	-	-		2,607	2,700
Investment mgm’t fees	9,492	-	-		9,492	8,813
	212,870	423,816	150,300		786,986	801,889
Apportionment	(212,870)	113,414	99,456		-	-
	-	537,230	249,756		786,986	801,889

5 OPERATING DEFICIT

ERATING DEFICIT
	2020	2019
	£	£
Operating deficit is stated after charging:
Operating leases - other assets	1,524	847

6 AUDITORS’ REMUNERATION

	2020 £	2019
		£
Audit services	3,570	6,000
Non audit services(includes fees from theprevious auditor)	13,971	8,615
	14,615	12,177

27

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

7 BOARD OF DIRECTORS OF THE CORPORATE TRUSTEE AND KEY MANAGEMENT PERSONNEL REMUNERATION

	2020	2019
	£	£
The aggregate emoluments payable to key management personnel	70,590	68,600

The chief executive is not a member of the charity’s defined contribution pension scheme. However, the charity makes contributions to their personal pension plan. During the period the total amount contributed to the personal pension was £4,873 (2019 £1,841).

The Board of Directors of the corporate trustee received no expenses or remuneration in the year.

• 8 EMPLOYEE INFORMATION

	2020	2019
The average number of persons employed during the year expressed in full time equivalents (16 hours or more per week) was:
Office staff	5	5
Wardens,cleaners and handyman	4	4
	9	9
	£	£
Staff costs (for the above persons)
Wages and salaries	219,068	195,602
Employer's National Insurance Contributions	20,256	13,859
Otherpension costs	15,259	10,601
	254,583	220,062

During the year one employee earned more than £60,000 (2019: one employee).

• 9 INTEREST RECEIVABLE AND SIMILAR INCOME

	2020	2019
	£	£
Interest received	11,573	26,039
Realised gain/(loss) on the disposal of investments	-	118,109
Miscellaneous income	2,690	21
	14,263	144,169

28

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

10 INTEREST PAYABLE AND SIMILAR CHARGES

	2020	2019
	£	£
Mortgage interest	12,396	14,506
Realised loss on the disposal of investments	-	-
	12,396	14,506

11 TANGIBLE FIXED ASSETS

	Housing Properties	Investment Properties	Freehold Property	Computer Equipment	Computer Equipment	Total
	£	£	£	£		£
COST OR VALUATION
At 1 January 2020	4,040,000	2,877,500	75,000	8,893		7,001,393
Additions	-	255,914	-	3,344		259,258
Transfer	-	(350,000)	350,000	-		-
Revaluations	-	80,000	-	-		80,000
At 31 December 2020	4,040,000	2,863,414	425,000	12,237		7,340,651
DEPRECIATION
At 1 January 2020	-	-	-	7,390		7,390
Charge foryear	-	-	-	2,607		2,607
At 31 December 2020	-	-	-	9,997		9,997
NET BOOK VALUE
At 31 December 2020	4,040,000	2,863,414	425,000	2,240		7,330,654
At 31 December 2019	4,040,000	2,877,500	75,000	1,503		6,994,003

HOUSING PROPERTIES

Housing properties comprise freehold land and buildings.

Historically, housing properties have been accounted for under the revaluation model and have been formally valued on a five-year cycle, with the corporate trustee providing a valuation for four of the five years. Due to the specialist nature of almshouse valuations, the lack of readily available market information to which the corporate trustee has access, as well as the cost burden on the Trust of moving to an annual valuation cycle, the corporate trustee has decided it would be more appropriate to account for freehold property under the cost model, in line with section 17 (property plant and equipment) of FRS 102

Housing properties are now included at deemed cost of £4,040,000 (historic cost: £4,288,895).

29

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

INVESTMENT PROPERTIES

The corporate trustee has established a five-year cycle for investment properties to be valued by an external RICS qualified surveyor.

The freehold interests in 2 - 16 Bampton Street, Tiverton were valued as at 31 December 2020 by an external valuer, Michael Lloyd, BSc (Hons) MRICS of Stratton Creber, Chartered Surveyors. The valuation was prepared in accordance with the requirements of the RICS Valuation – Global Standards, SORP and FRS102.

The Trust occupies office accommodation within The Market House for the purpose of its operations, the value the external valuer provided for these offices (£350,000) have been transferred to Freehold Property. This was carried out in 2018, but the transfer was not reflected in the 2018 financial statements. Consequently, it has been corrected for in these financial statements. The basis of value was Fair Value.

The remaining investment properties held were valued by the corporate trustee on the basis of fair value as at 31 December 2020.

Valuation is represented by:	2020	2019
	£	£
Historical cost	296,927	296,927
Revaluation	2,566,487	2,580,573
	2,863,414	2,877,500
Revaluation:	2020	2019
	£	£
Balance as at 31 December 2019	2,580,573	2,580,573
Net of additions and transfers	(94,086)	-
Revaluation	80,000	-
Balance as at 31 December 2020	2,566,487	2,580,573

30

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

12 INVESTMENTS HELD AS FIXED ASSETS

(Financial assets measured at fair value through the surplus/ (deficit))

	2020	2019
	£	£
MARKET VALUE OF LISTED INVESTMENTS
At 31 December 2019	3,250,522	2,761,259
Additions	262,261	665,694
Income reinvested	16,487	63,739
Disposal proceeds	(8,517)	(929,612)
Realised gains/(losses)	(4,327)	118,109
Unrealisedgains/(losses)	106,414	316,219
At 31 December 2020	3,622,840	2,995,408
Cash held as part of investment portfolio (movement)	(263,236)	255,114
	3,359,604	3,250,522
Historical cost	2,593,996	2,587,000

13 DEBTORS – ALL RECEIVABLE WITHIN ONE YEAR

	2020	2019
	£	£
Trade debtors
Social housing rent arrears	4,346	956
Social housing utility arrears	114	-
Other	8,123	3,125
	12,583	4,081
Prepayments and accrued income	32,482	22,154
Other debtors	4,169	4,789
	49,234	31,024

14 CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR

	2020	2019
	£	£
Mortgages	31,802	30,000
Trade creditors and rents paid in advance	43,437	30,071
Other creditors and accruals	34,956	56,171
	110,195	116,242

15 CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 2020 £ Mortgages 580,009	15 CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 2020 £ Mortgages 580,009
	2020	2019
	£	£
	580,009	613,035

31

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

16 MORTGAGES

(Financial liabilities measured at fair value through the surplus/ (deficit)).

Analysis of maturity of debt:	2020 £	2019
		£
Less than one year or on demand	31,802	30,000
Between one and two years	32,394	30,000
Between two and five years	100,871	120,000
After fiveyears	446,744	463,035
	611,811	643,035

The mortgages mature in July 2037.

Capital is repayable in monthly instalments, which commenced in August 2004. Interest is charged at 2.95% and LIBOR +0.65%.

The mortgages are secured on certain freehold housing and investment properties.

17 INCOME AND EXPENDITURE RESERVES

		Surplus
	2019	for year	Revaluation		Transferred	Utilised	2020
	£	£	£		£	£	£
Programme of works fund	20,814	-	-		122,430	(122,430)	20,814
Extraordinary repair fund	36,582	-	-		5,040	(510)	41,112
Cyclical maintenance fund	96,547	-	-		1,638	(38,075)	60,110
Routine works	5,208	-	-		62,326	(22,098)	45,436
Other	1,268,893	14,550	63,015		(191,434)	183,113	1,338,137
	1,428,044	14,550	63,015		-	-	1,505,609

Tiverton Almshouse Trust has established a regular programme of works.

Part of other reserves has been earmarked by the corporate trustee for a particular purpose. Such designations may be reversed by future Trustee decisions.

Expenditure is taken through the income and expenditure account. A transfer is then made as appropriate.

18 CAPITAL AND RESERVES

Permanent Endowment

These reserves represent the current value of the Housing and Investment Properties together with the current value of any other investments that were held at the date of the merger and cash deposited with Standard Life on behalf of Alexandra Lodge Trust as at the date of the merger.

Expendable Endowment

These reserves represent the current value of any investments purchased since the merger.

32

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

19 CAPITAL COMMITMENTS

	2020	2019
	£	£
Capital expenditure that has been contracted for but has not been provided for in the financial statements	-	232,245
	-	232,245

.

20 LEASING COMMITMENTS

Total future minimum lease payments under non-cancellable operating leases are as follows:

	2020 2019 £ £
Not later than one year	1,417 4,986
Later than one and not later than fiveyears	- 5,313
Later than five years	1,417 10,299

21 PENSION COSTS

The charity operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the charity in an independently administered fund. The pension cost charge represents contributions payable by the charity to the fund and amounted to £10,386 (2019: £10,601).

22 RELATED PARTY TRANSACTIONS

As at the 31 December 2020 two directors of Tiverton Almshouse Trustee Limited were councillors / employees of related Local Authorities.

The husband of one of the directors of Tiverton Almshouse Trustee Limited is a councillor/employee of related Local Authorities and a tenant of Raymond Penny House.

Any transactions with the Local Authorities were at arms-length on normal commercial terms and these individuals were not able to use their position to their commercial advantage.

23 CONTROL

The ultimate controlling party is the board of directors of Tiverton Almshouse Trustee Limited.

33

TIVERTON ALMSHOUSE TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020

24 RECONCILIATION OF OPERATING SURPLUS / (DEFICIT) TO CASH FLOW FROM OPERATING ACTIVITIES

	2020		2019
	£		£
Surplus / (deficit) for the year	196,637		524,020
Rents received from investment properties	(257,271)		(254,903)
Mortgage interest paid	12,396		14,506
Interest received	(11,573)		(26,039)
Dividends received	(30,491)		(68,239)
Depreciation and impairment of tangible fixed assets	2,607		2,700
Realised (gain) / loss on disposal of investments	4,327		(118,109)
Unrealised (gains) / loss on investments	(106,414)		(316,219)
Income reinvested	-		(63,739)
Proceeds of sale of tangible fixed assets	-		-
Carrying amount of tangible fixed asset disposals	-		-
Revaluation on tangible fixed assets	(80,000)		(55,000)
(Increase) / decrease in trade and other debtors	(18,211)		(4,233)
Increase /(decrease)in trade and other creditors	(7,848)		5,483
Net cash flow from operating activities	(295,841)		(359,772)

25 ANALYSIS OF CHANGES IN NET DEBT

	2019	Cashflows	Non-cash changes	2020
	£	£	£	£
Long-term borrowings	613,035	-	(33,026)	580,009
Short-term borrowings	116,242	(39,072)	33,026	110,196
Total liabilities	729,277	(39,072)	-	690,205
Cash and cash equivalents	(1,561,112)	569,614	-	(991,498)
Total	(831,835)	530,542	-	(301,293)

34

Tiverton Almshouse Trust Market House 18a Bampton Street TIVERTON Devon EX16 6AA

Francis Clark LLP Centenary House Peninsula Park Rydon Lane Exeter EX2 7XE

T 01392 667000 F 01392 667001 pkf-francisclark.co.uk

Our Ref: 10103EX/NXH/SJT

14 May 2021

Dear Trustees

In accordance with our normal practice we are writing to draw your attention to various matters which arose during the course of our audit of the company’s accounts for the year ended 31 December 2020.

1. Expected Modifications to the Auditors’ Report

There are no expected modifications to the auditors’ report.

2. Identified Misstatements

There were no unadjusted misstatements determined during the course of our audit.

Presentational adjustments were discussed with Doreen Woodward (see section 4 below).

3. Significant Deficiencies in the Accounting and Internal Control Systems

As you are aware from our letter of engagement, our audit procedures were directed towards testing the accounting systems in operation upon which we have based our assessment of the accounts. In assessing whether a deficiency is significant we consider the likelihood of an error arising in the accounting system and its potential magnitude.

We did not identify any significant deficiencies in internal financial controls during the course of our audit.

4. Qualitative Aspects of the Entity's Accounting Practices and Financial Reporting

The following qualitative aspects of the entitys accounting practices and financial reporting were discussed and agreed at our closing meeting on 01/04/21:

Presentation of commercial properties

During the course of our audit we identified that rental income from non-social housing properties was being shown net of expenditure in the financial statements. The netting off of commercial income and expenditure is not permitted under applicable accounting standards and following discussion with the

Tiverton Almshouse Trust 14 May 2021

Trustees has been reclassified in the current and comparative year to separately identify income and expenditure from non-social housing.

Fixed Assets – Significant Components

Historically major components of social housing properties have not been separately identified and depreciated over their individual useful lives. This was discussed with the Trustees and it was agreed that it would not be practicable to perform a retrospective review for significant components but that future fixed asset additions would be reviewed to ensure significant components are separately identified.

Depreciation of Freehold Property and Housing Property held at cost

Freehold property and social housing property is not depreciated on the basis that the residual value is not materially different from the carrying value (and therefore depreciation would be immaterial). The Trustees have agreed to review this annually to ensure that residual values are not significantly different to the carrying value which might give rise to the need to apply a depreciation charge.

Property Valuations

We discussed the valuation models available for non-investment properties. Given the ongoing cost of professional valuations, the Trustees have concluded that social housing properties are to be held under the cost model. The existing carrying value has been treated as deemed cost on transition to this methodology.

5. Other Matters Required by Auditing Standards to be Communicated

There are no other matters that we are required by Auditing Standards to communicate to you.

6. Audit Independence

We have discussed with you the fact that we provide services to the company in addition to acting as auditors. We confirm that we have not provided any non-audit services during the year.

The contents of this report are subject to the terms and conditions of our appointment as set out in our engagement letter of 7 April 2021.

This report is made solely to the Corporate Trustee of Tiverton Almshouse Trust as a board in accordance with our engagement letter. Our work has been undertaken so that we might state to the Corporate Trustee of Tiverton Almshouse Trust those matters we are required to state to them in accordance with International Standards on Auditing (UK and Ireland) in this 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 Board of Tiverton Almshouse Trust for this report or for the opinions we have formed. It should not be provided to any third-party without our prior written consent.

If we can be of any further assistance, please contact Neil Hitchings.

Yours faithfully

FRANCIS CLARK LLP

E-mail: [e-mail]

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