Charity number- 213463 THE CUTBUSH & CORRALL CHARITY TRUSTEES, REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 THE CUTBUSH & CORRALL CHARITY CONTENTS Page Reference and administrativo details of the Charity. its Trustees and advisers Trustees. report Independent audltors. report on the flnanclal statements 9-11 statement of financial activities 12 Balance sheet 13 Statement of Cash flows 14 Notes to the financial statements 15-32 THE CUTBUSH & CORRALL CHARITY REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY. ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 DECEMBER 2021 Trustees Mr W L Cockcroft DL Ico-optedl Mrs S R Darbyshire Ico-opledl Miss C E Highwood, Chairman Ico-optedl Mr S Morris Ico-optedl, Vice Chairman Ico-optedl Mr R L F Silkin Ico-optedl Mr G Proud Ico-optedl Mrs E Haggart Ico-optedl Mr C Enolish Inomination expired August 2020 but renominated in February 20211 Mrs D Joy Inominatedl Miss D Smith (co-opted on 21 January 20211 Charity registered number 213463 Principal office College Farm College Avenue Maidstone Kent ME15 6YJ Independent auditors MHA Maclntyre Hudson Chartered Accounlanls Victoria Court 17-21 Ashford Road Maidstone Kent ME14 5DA Bankers National Westminster Bank ple 3 High Street Maidstone Kent ME14 1XU Solicitors Bfftchers LLP Somerfield House 59 London Road Maidstone Kent ME16 8JH Page 1 THE CUTBUSH & CORRALL CHARITY REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY. ITS TRUSTEES AND ADVISERS ICONTINUED} FOR THE YEAR ENDED 31 DECEMBER 2021 Investment Advlsors Canaccord Genuily Wealth Management 41 Lothbury London EC2R 7AE Property Advlsors J A Warner Ltd The Guard House, Church Lane The Historic Dockyard Chatham Kent ME44TE Clerk and Chlef Offlcer Mrs E Abi-Aad Head of Flnance & Resources Mrs N Weal Page 2 THE CUTBUSH & CORRALL CHARITY TRUSTEES. REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 The Trustees present their report and the financial statements for the year ended 31 December 2021. The Trustees, have adopted the provisions of the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Stsndard applicable in the UK and Republic of Ireland IFRS1021 leffeclive January 20151 in preparing the Trustees, Report and fi'nancial statements of the Charity. Oblectlves and actlvltles a. Objectlves and Actlvltles The Charity's objectives as sel out in the governing document are.. To provide almshouses for the use of persons in need by reason of age, ill health, disability, financial hardship or other disadvantage of not less than fity years of age, most of whom are inhabitsnts of the Borough of Maidslone, and in the case of the Harrielsham almshouses, of not less than sixty years of age who are resident in Harrietsham, six of the beneficiaries being Freemen of the Fishmongers Livery Company., To assist young persons under the age of twenty four years in need of financial assistance who are preparing for, entering upon or engaged in any trade, occupation or profession by provision of tools or books, payment of fees, travelling expenses or other such means as will fit them to earn their own living or advance them in life. Such charitable purposes for the benefit of the almshouse residents as the trustees decide. The Charity's aims are.. The relief of poverty by the provision of almshouse accommodation for the beneficiaries and such charitable purposes for the benefit of the residents as the Trustees decide. To maintain the almshouses in good repair and condition and updated where necessary to be in line with modern day expectations. To acquire more land upon which there would or could be erected more almshouses to be constructed lo as high a standard as the Trustees consider financially prudent. To maximise development or redevelopment opportunities as the Trustees consider financially prudent. Wherever possible to maintain and increase the underlying value of the Charity's non-almshouse properties and assets consistent with appropriate professional advice. b. Actlvltles undertaken to achleve objectlves The first aim ststed above is achieved through the structure of the Charity as detailed in the "Organisational Structure and decision-making policies" section below. The second aim is achieved through the attention given by the management team of the Charity to the maintenance of the almshouses and upgrading them wherever possible. The process includes implementing the recommendations of the Charity's quinquennial report and further, when a propety becomes empty, replacing the bathroom and kitchen and heating system where appropriate. The third and fourth aims are achieved by the vigilance of the management team of the Charity in identifying new potential sites for development. Page 3 THE CUTBUSH & CORRALL CHARITY TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 31 DECEMBER 2021 Oblectlves and actlvltles (contlnuedl c. Maln actlvltles undertaken to further the Charlty's purposes for the publlc beneflt The Trustees have paid due regard to the guidance on public benefit published by the Charity Commission when reviewing the aims and objectives of the charity and in planning future aclivilies. The Trustees believe that the activities undertaken in the year for achieving the objectives of the Charity have met the public benefit requirement. Achlevements and performance a. Maln achlevements of the Charlty Using the Government's roadmap 122 February 20211 lo navigate out of the country's third national lockdown through the easing of restrictions during spring & summer, and the lightening of the rules that came with the winter plan and finally Plan B as the NHS came under pressure at the end of the year proved both time consuming and challenging. COVID Secure Workplace risk assessments were reviewed and updated regularly with the Charity's staff tsking necessary precautions lo keep themselves and residents safe as COVID transmission rates raised and declined. Only the Finance Manager was able lo work effectively from home and so a temporary office was set up lin a vacant almshouse 24 College Road) to accommodate the Care & Support team and allow their work lo continue in a socially distant way. In response lo the prospect of staff having to work remotely for a sustained period, the Charity moved quickly lo develop a bespoke online record keeping system Iln-Forml. Transfer of paper files look place al the end of 2020 and team members have been using the online system since the start of the year. It has proved an efficient tool and helped improve management of individual casework. As and when allowed home visits lo residents resumed leilher indoors or on the doorstep) and when possible, social activities were facilitated. These small and larger outside gatherings were much appreciated by residents who enjoyed the opportunities to spend lime with their neighbours be it having an ice cream delivered on a sunny day, a BBQ on site, watching the Euros on an outdoor screen, a trip lo the seaside (Dover & Easlbournel or the not so traditional Christmas dinner"Turkish not Turkey" al a local restsurant. Whilst a few residents and staff contracted COVID-19, the team is unaware of any individual having to be admitted to hospital for treatment. COVID-19 impacted the work of the Maintenance Team as for lengthy periods they were only able to undertake urgent, necessary works (like leaks, loss of heal or powerl in resident's homes. When restrictions eased the list of routine Maintenance tasks to be undertaken increased. Nevertheless, the backlog of important electrical installation inspections was addressed by the end of the year157 inspections being undertaken in 20211. In May, Trustees seized the opportunity to visit five vacant almshouses lin various slates of refurbishmentl, lo see for themselves the range of property types, the differences in style, quality and suitability for the Charity's beneficiaries. One Green Homes Grant application was successful in attracting £5,000 contribution toward the cost of installing an air source heal pump al 72 Mole Road- unfortunately 12 similar bids for the fund failed to progress through the extremely bureaucratic application process. At the end of the year all the Charity's almhouses are believed lo meet lor exceed) an Energy Performance Certificate E rating Ilhere remain 23 uncertified almshouses - all of which are modern and more energy efficient than most homes). Whilst the Charity is not bound by the Minimum Energy Efficiency Standards IMEESI regulations which apply to private landlords, it remains committed to improving energy efficiency standards across the board, to alleviate fuel poverty amongst residents. Page 4 THE CUTBUSH & CORRALL CHARITY TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 31 DECEMBER 2021 Achlevements and performance Icontlnuedl Knowing the need lo address issues raised over recent years (primarily aC￿SsIbl111Y and prohibitively expensive energy costs) by occupants living in the College Road almshouses, the Charity gained planning consent in October lo convert the six houses into twelve one bedroomed flats. Following individual consultstion, all remaining occupants were transferred lo more suitable almshouses leaving the site ready for the construction phase of development. Discounting £15,900 income lost as a result of the College Road almhouses being left vacant, void costs amounted lo £18,300 equating lo 2.20/0 of budgeted income. Being satisfi'ed that the Charity had made significant progress during the previous S years in temis of the development and implementation of policies and procedures, embedding health & safely practices, improving almshouse maintenance, increasing occupancy levels, record keeping and standards of support for beneficiaries, Trustees sought lo address the identified risk 'overstretch of the senior management team" At the beginning of the year, a new Finance Sub-committee was established to advise the Board of Trustees with regard to its duly to oversee the Charity's financial affairs and in October Trustees approved a new staff structure which will ensure there is capacity within the team lo enter a new phase of strategic development. Flnanclal revlew a. Golng concem After making appropriate enquiries, the Trustees have a reasonable expectstion that the Charity has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue lo adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the accounting policies. The economic impact of COVID-19 has been considered as part of the going concern assessment. b. Pemianent Endowment Funds A Permanent Endowment Fund is held on trust lo be retained for the benefit of the Charity as a capitsl fund, and is therefore held as investments and tangible fixed assets. During the year, net gains on investments amounting 10 £294,734 12020 losses of £237,786) were recognised in the fund. A transfer from the accumulated income fund to the permanent endowment fund amounting to £6,083 12020.. £6,083) was made in respect of the Recoupment Order made by the Charities Commission on 13 May 1993. c. Flnanclal revlew 11 is the general policy of the Trustees to make sure that the level of weekly Maintenance contributions meets the costs of running the Charity as identified in the Ststemenl of Financial Aclivilies. In 2021 the weekly maintenance contributions amounted to £665,142 12020.. £674,037) and the cost of running the Charity was £738,58912020.' £668,113). In general terms the Trustees. policy was successful. The nel surplus for the year after adjusting for gains and losses on investments amounted to £546,47212020." net defi'cit £1,994). The Accumulated Income Fund is an unrestricted fund made up of accumulated surpluses of income and expenditure. The Charity aims lo hold approximately 6 months of expenditure as cash and l or easily accessible reseNes in this fund. Cash reserves held at the year end exceeded this amount. Total reserves at the year end amounted lo £12,556,913 12020.. £12,010,441), of which £2,547,609 12020.. £2,246,792) were held as restricted permanent endowment funds, £1,588,395 12020.. £1,588,3951 held as restricted funds and £2,111,345 12020.. £1,746,619) held as designated funds. The charity has continued lo Page 5 THE CUTBUSH & CORRALL CHARITY TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 31 DECEMBER 2021 make further investments to provide for future extraordinary repair, improvement or rebuilding of the homes and properties belonging lo the Charity and also as part of a Recoupment Order made by the Charities Commission as detailed in note 2.13 to the accounts. The Trustees take advice from their investment advisers, Canaccord Genuily Wealth Management in making these investments. In accordance with the Trustees wishes the Charity's broker {Canaccord Genuity Wealth Management) has been instructed lo aim to maintain a 40.'60 split of the permanent endowment fund be￿een property and other types of investments. The investments held as fixed assets have produced an income of £104,44912020." £104,904) for the year and there was a nel increase in their market value of £512,74412020'. decrease £188,288) after taking into account the additions and disposals in the year. d. Funds held as custodlan trustee on behalf of others The Charity does not hold any assets as custodian for any third parties. e. Fundralslng standards Informatlon The Charity does not undertake any fundraising activities itself, nor does any other person on behalf of the charity. Neither the Charity or any other person acting on behalf of the Charity was subject lo any voluntary scheme or voluntary standard for regulating fundraising. As such, there were no failures to comply with any such scheme and the Charity did not receive any complaints during the year in relation lo fundraising activities. Structure, govemance and management a. Constltutlon The Cutbush and Corrall Charity is a charity registered by the Charity Commission and govemed by the Scheme dated 15 November 2010 las amended 16 July 20201. 11 is an unincorporated association. b. Methods of appolntment or electlon of Trustees There are ten Trustees when the Board is complete. During 2020 there was a transition from six to eight co- oplative Trustees whose term of office endures for five years. They are voted onlo the Board by a simple majority of votes cast by the existing Trustees at a special meeting of the Trustees. The remaining two Trustees are nominative Trustees whose term of Offi￿ endures for four years and who are appointed by Maidslone Borough Council. The Trustees holding office during the year are detailed on page 1. Candidature for a co-oplative Trustee is formulated following a skills audit undertaken by the Trustees. c. Organlsatlonal structure and declslon-maklng pollcles The Trustees meet four limes a year as well as at any special Meeting convened. Some Trustees, duties are delegated to sub-committees comprising usually four Trustees and the Clerk and Chief Officer. Any such sub- committee reports lo the Main Board for their actions and decisions lo be noted or sanctioned, as the case may be. Such sub-commillees may deal with issues like the selection of residents, decisions regarding buildings and oversight of finances. The Clerk and Chief Officer is responsible for the implementation of the Trustees, decisions and has overall responsibility for the management of the Charity. During the year, the Clerk and Chief Officer is supported by three senior managers (Finance and Office Manager, Care and Support Manager and Maintenance Supervisor) and a small team of support staff. The Clerk and Chief Officer has authority lo tske decisions herself relating lo day lo day management items but is always accountable for any such decisions to the Trustees. Page 6 THE CUTBUSH & CORRALL CHARITY TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 31 DECEMBER 2021 Structure, govemance and management Icontlnuedl d. Pollcles adopted for the Inductlon and tralnlng of Trustees All new Trustees are given an induction pack by the Clerk and Chief Officer to include a copy of the Charity Commission Schemes, previous yearfs Accounts, Minutes of the last Trustees Meeting and a Residents Handbook. The responsibilities of a Charity Trustee are also explained by the Clerk and Chief Officer. In addition the Clerk and Chief Officer ensures that the new Trustee is familiarised lin general temisl with the housing stock and the day to day workings of the Charity. The Trustees are offered the opportunity of training al the seminars organised for this purpose by the Almshouse Association. e. Pay pollcy for key management personnel The salaries of the key management personnel are set by the Trustees at the Trustees, meetings having regard lo their responsibilities and levels of inflation. f. Related party relatlonshlps There are no related parties, other connected charities or organisations that the Charity is required to co- operate with in pursuit of its charitsble objectives. g. Rlsk management Major risks to which the charity is exposed as identified by the Trustees are reviewed on a regular basis and systems or procedures are in place lo manage those risks. Plans for future perlods During a Strategy Awayday18 September 20211, Trustees reached a number of key agreements.. .To revise the Charity's objects lo focus on meeting people's housing and wel￿being needs rather than alleviating poverty .To meet the needs of aging residents for practical and social support .To introduce age-appmpriale adaptations and environmental improvements to existing buildings when opportunities present .To repurpose heritsge buildings for wider community use with a view to financing the construction of new purpose built almshouses .To develop new age-friendly almshouses that will allow our aging population lo live well for longer The new Head of Operations Ilakes up post April 20221 will play a key role in the Charity as it develops. The poslholder will assume responsibility for much of the day-to-day management of the Charity's activities, thereby enabling the Clerk & Chief Officer to focus on governance arrangements and the Charity's strategic development. Plans are in place IAugusl 20221 for work to commence on the conversion of the College Road houses into flats. This is the first major capital project Icirca £1 million) that the Charity has undertaken since the development of the Thomas Robert Garden flats in 2014. Trustees are aware that financing the project will prove challenging (particularly in light of the potentially negative effects of the Ukraine situation on the Charity's investment portfolio). As result, the completion of the review of Weekly Maintenance Charge (which stalled in 20211 will become a primary focus to ensure the Charity is optimising income from this source thus ensuring Page 7 THE CUTBUSH & CORRALL CHARITY TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 31 DECEMBER 2021 Plans for future perlods Icontlnuedl current operations can be sustained and the longer-term strategy achieved. Statement of Trustees. responslbllltles The Trustees are responsible for preparing the Trustees, report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England & Wales requires the Trustees lo prepare financial statements for each financial year which give a true and fair view of the stste of affairs of the Charity and of ils incoming resources and application of resources, including ils income and expenditure, for that period. In preparing these fi'nancial statements, the Trustees are required lo.. select suitable aceounling policies and then apply them consistently", observe the methods and principles of the Charities SORP IFRS 1021", make judgements and accounting estimates that are reasonable and prudent., slate whether applicable UK Accounting Standards {FRS 102} have been followed, subject lo any material departures disclosed and explained in the financial statements,. prepare the financial statements on the going conTrrn basis unless it is inappropriate to presume that the Charity will continue in business. The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Charity's transactions and disclose with reasonable accuracy al any time the financial position of the Charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the Charity Commission Scheme. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Disclosure of infomiation to auditors Each of the persons who are Trustees al the lime when this Trustees, report is approved has confirmed Ihal.. so far as that Trustee is aware, there is no relevant audit information of which the charity's auditors are unaware, and that Trustee has taken all the steps that ought lo have been taken as a Trustee in order to be aware of any relevant audit information and to establish that the charity's auditors are aware of that information. Auditors The auditors, MHA Maclntyre Hudson, have indicated their willingness to continue in office. A resolution lo reappoint the Auditors will be pul to the Trustees at the Annual General Meeting. Approved by order of the members of the board of Trustees and signed on their behalf by.. tarolinE (May 2J 20?2. 4 30pmi Miss C E Highwood Chairman of Trustees Dale.. Page 8 THE CUTBUSH & CORRALL CHARITY INDEPENDENT AUDITORS. REPORT TO THE MEMBERS OF THE CUTBUSH & CORRALL CHARITY Opinion We have audited the financial slalements of The Cutbush & Corrall Charity (the 'charity'l for the year ended 31 December 2021 which comprise the Statement of financial activib"es, the Balance sheet, the Statement of cash flows and the related notes, 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 Stsndard 102 'The Financial Reporting Stsndard applicable in the UK and Republic of Ireland, (United Kingdom Generally Accepted Accounting Practi￿1. The financial statements have been prepared In accordance with Accounting and Reporting by Charities preparing their accounts in accordan￿ with the Financial Reporting Standards applicable In the UK and Republic of Ireland IFRS 1021 in preference to the Accounting and Reporting by Charities.. Statement of Recommended Practice issued on 1 April 2005 which is referred to in the exlanl regulations bul has been withdrawn. This has been done in order for the accounts to provide a true and fair view in accordance with the Generally Accepted Accounting Practice effective for reporting periods b￿InnIng on or after 1 January 2015. In our opinion the financial statements.. give a true and fair view of the stale of the charity's affairs as al 31 De￿mber 2021 and of its incoming resources and application of resources for the year then ended., have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice", and have been prepared in accordance with the reqU1￿ments of the Charities Act 2011. Basis for opinion We conducted our audit in accordance with Intemalional Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further described in the Auditors. 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 United Kingdom. including the Financial Reporting Council'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 lo provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the Trustees, use of the going concem 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 Un￿rtaIntieS relating lo events or onditions that, individually or collectively, may cast significant doubt on the charity's ability lo continue as a going concem for a period of al least twelve months from when the financial statements are aulhorised for issue. Our responsibilities and the resF)onsibilities of the Trustees with respect lo going concern are described in the relevant sections of this report. Page 9 THE CUTBUSH & CORRALL CHARITY INDEPENDENT AUDITORS. REPORT TO THE MEMBERS OF THE CUTBUSH & CORRALL CHARITY (CONTINUED) Other information The other Information comprises the information included in the Annual report other than the financial statements and our Auditors. report Ihereon. The Trustees are responsible for the other information contained within the Annual report. Our opinion on the financial statements does not cover the other information and, except lo the extent otherwise explicidy stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is lo read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtsined in the course of the audit, or otherwise appears lo be materially misslaled. If we Identify such material Inconsistencies or apparent material misstslements, we are required to determine whether this gives rise to a material misslatemenl in the financial stslements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing lo report in this regard. Matters on which wo are requirgd to report by exception We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion.. the information given in the Trustees, report is inconsistent in any material respect wlh the financial slalements., or sufficient accounting records have not been kept,. or the financial statements are not in agreement with the accounting records and returns,. or we have not received all the information and explanations we requi￿ for our audit. Responsibilities of trustees As explained more fully in the Trustees, responsibilities statement, the Trustees are responsible for the preparation of the financial statements which give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustees are responsible for assessing the charity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the charity or to cease operations, or have no realistic altemalive but to do so. Auditors. responsibilities ft>r the audit of the financial statements We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. Our objectives are lo obtain reasonable assurance about whether the financial statements as a whole are free from material misslatemenl, whether due to fraud or error, and to issue an Auditors, report that Includes our opinion. Reasonable assurance is a high level of assLJrance, bul is not a guarantee that an audit conducted in accordance with ISAS IUKI will always delect a material misstatement when Il exists. Misstatements can arise from fraud or error and are considered material if, individLJally or in the aggregate. they could reasonably be expected lo influence the economic decisions of users taken on the basis of these financial statements. Page 10 THE CUTBUSH & CORRALL CHARITY INDEPENDENT AUDITORS. REPORT TO THE MEMBERS OF THE CUTBUSH & CORRALL CHARITY (CONTINUED) Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to delecl material misstatements In respect of Irregularib"es, including fraud. The extent lo which our procedures are capable of delecling irr￿ularitie$, Including fraud Is detsiled below.. Reviewing minutes of meetings of those charged with governance., Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting eslimales for bias,. Reviewing financial slalement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations., and Enquiry of management, those charged with govemance around actual and potential litigation and claims. 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 misstalemenl in the financial statements or non-compliance with regulation. This risk Increases the more that compliance with a law or regulation is removed from the events and transactions reflected In the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due lo fraud rather than error, as fraud involves intentional concealment, forgery, 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.or .uklaudilorsres onsibilities. This description forms part of our Auditors, report. Use of our report This report is made solely to the charitys Iruslees, as a body, in accordance with Part 4 of the Charities IAc¢ounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might stale to the charity's trustees those matters we are required to stsle to them in an Auditors, report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility lo anyone other than the charity and its Iruslees, as a body, for our audit work, for this report, or for the opinions we have formed. MHA Maclntyre Hudson stalulory Auditors Maidslone United Kingdom Dale". MHA Maclntyre Hudson are eligible to act as auditors in terms of secb'on 1212 of the Companies Act 2006. Page11 THE CUTBUSH & CORRALL CHARITY STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2021 Unrestricted funds 2021 Restricted Endowment funds funds 2021 2021 Total funds 2021 Total funds 2020 Note Income and endowments from: Donations and legacies Charitable activities Investments Other income 2,000 665.446 104.871 2,000 665,446 104.871 674,176 105,642 1,953 Totsl income 772.317 772,317 781, 771 Exponditure Expenditure on.. Raising funds Charitable acb'vilies 2,821 665,292 738,589 738,589 Total expenditure 738.589 738.589 668, 113 Net lexpenditurell income before gainslllossesl Nel gainslllossesl on investments 33,728 33,728 113,658 218.010 294.734 512.744 (7 15,652) Net incomel lexpenditure) Transfers be￿een funds 251,738 294,734 546,472 (1,994) 18 {6,0831 6,083 Net movement in funds 245.655 300.817 546.472 (1,994) Reconciliation of funds: Total funds brought forward 8,175,254 245,655 1,588,395 2,246,792 300,817 12,010,441 546,472 12,012,435 (1,994) Nel movement Total funds carried forward 8,420.909 1,588.395 2,547.609 12.556.913 12,010,441 The Statement of financial activities includes all gains and losses recognised in the year. The notes on pages 15 to 32 form part of these financial statements. Page 12 THE CUTBUSH & CORRALL CHARITY BALANCE SHEET AS AT 31 DECEMBER 2021 2021 2020 Note Fixed assets Tangible assets Investments 13 7,634,314 4.305,582 7, 620, 704 3, 752,046 14 11.939.896 11,372, 750 Current assets Debtors Cash al bank and in hand 15 33.471 623.593 28,289 640, 94T 657,064 669,236 Creditors.. amounts falling due wthin one year 16 140.047) (31,545) Net current assets 617.017 637,697 Total net assets 12.556,913 12,010,441 Charity funds Endowment funds 18 2,547,609 1,588,395 2,246, 792 1, 588.395 Reslricled funds Unrestricted funds 18 Designated funds General funds 18 2,111,345 6,309,564 1. 746, 619 6,428, 635 18 Total unrestricted funds 18 8.420.909 8, 175,254 Total funds 12.556.913 12,010,441 The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by.. -4 Orri> caroline Imay 25, 2022. 4.'30pml Miss C E Highwood Trustee Mr S Morris Trustee Dale. 25 May 2022 25 May 2022 The notes on pages 15 to 32 form part of these financial statements. Page 13 THE CUTBUSH & CORRALL CHARITY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021 2021 2020 Note Cash flows from operating activities Nel cash used in operating activities 21 23,802 100,305 Cash flows from investing activities Dividends, interests and rents from investments Purchase of property, plant and equipment Proceeds from sale of investments Purchase of investments 104,871 1105,2351 105,813 (14,046) 132,636 (130,000) 140,7921 Net tash (used inllprovided by investing activities 141,1561 94,403 Cash flows from financing activities Net cash provlded by flnanclng actlvltles Change in cash and cash equivalents in the year Cash and cash equivalents at the beginning of the year 117,3541 640,947 194,708 446,239 Cash and cash equlvalents at the end of the year 22 623,593 640,947 The notes on pages 15 to 32 form part of these financial statements Page 14 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 General information The charity is a charity registered by the Charity Commission in England and Wales and governed by the Scheme dated 15 November 2010. The registered address is given on the administrative details page of these financial statements. The financial statements are presented in sterling which is the functional currency of the charity and rounded lo the nearest pound. Compliancg With Accounting Standards The financial statements have been prepared in a¢cordanTr with Accounting and Reporting by Charities.. Statement of Recommended Practi￿ applicable to charities preparing their accounts In accordance with the Financial Reporting Standard applicable In the UK and Republic of Ireland IFRS1021 (effective January 20151 (Charities SORP FRS1021 las updated through Update Bulletin 1 published on 2 February 2016 and Update Bulletin 2 published on 5 October 20181, the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS1021 and the Charities Act 2011 and applicable regulations. There were no material departures from those standards. Accounting policios 2.1 Basis of preparation of financial statements The Cutbush and Corrall Charity lincorF)0￿tln9 the Quested Amshouse Charity) meets the definition of a public benefit entity under FRS102. Assets and liabilities are initially recognised at historic cost unless otherwise slated in the relevant accounting policy note. The financial statements are prepared on a going concern basis and there are no material uncertainties that cast significant doubt on the charity's ability to continue as a going concern. 2.2 Income Income is recognised when the charity has entitlement to the funds, any performance conditions allached lo the items of income have been met, il is probable that the income will be received and that the amount can be measured reliably. For legacies, entitlement is taken as the eadier of the dale on which either. the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the exeeulors lo the charity that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy is only considered probable when the amount Can be measured reliably and the charity has been notified of the executor's intention lo make a distribution. Where legacies have been notified to the charity, or the charity is awao of the granting of probate, and the criteria for income recognition have not been mel, then the legacy is treated as a contingent asset and disclosed if material. Donations are recognised in the period in which they are received, unless there are conditions that have not been mel before the charity is entitled lo the resource. Weekly maintenance contributions, rents receivable and deF)OSit interest are included in the financial statements based on the period for which they are due. Income from investments in the form of dividends and interest is included in the financial statements when declared. Income from government and other grants, whether capital or revenue grants, is recognised when the charity has entillemenl to the funds, any performanee conditions attached to the gmnts have been mel, it is probable that the income will be received, and the amount can be reliably measured and is not deferred. Page 15 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Accounting policies Icontinuedl 2.2 Income Icontinuedl Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the servi￿. 2.3 Expenditure Expenditure is recognised once there is a legal or conslruclive obligation to make a payment lo a third party, it is probable that setdement will be required and the amount of the obligation can be measured reliably. Expenditure Is classified under the following activity headings.. Costs of raising funds comprises the costs relating to the investment properties and investments. Expenditure on charitable activities includes the costs of running and maintaining the almshouses and providing services and benefits lo the residents. 2.4 Allocation of support costs Support Costs are those functions that assist the work of the charity but do not directly undertake charitable aclivilies. Support costs include office costs, personnel, payroll and governance costs which support the charity's programmes and aclivilies. These costs have been allocated between the cost of raising funds and expenditure on charitable activities. 2.5 Intorgst recgivablo Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Charity., this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited. 2.6 Tangible fixed assots and doprgciation The almshouses and other properties are Included al their depreciated cost in the balance sheet each year. The period over which each of the properties is depreciated varies from 75 years to 300 years depending on the age and condition of the properties conTrrned. The costs of Almshouses for which depreciation is calculated includes the value of land. This is departure from UK GAAP and the Charities SORP IFRS 1021 which requires the value of land to be removed for depreciation calculations due to Its high residual value. The Trustees are of the view that this accurately reflects the nature of assets because Il Is unlikely the almshouses will ever be sold. The computer equipment is slated at cost less depreciation. Depreciation is provided at 20,/0 on straight line basis to write off the cost of fixed assets over their expected useful lives. 2.7 Invostments Investments are valued at fair value at 31 December each year, and realised and unrealised gains or losses are shown in the Statement of Financial Activities. Page 16 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Accounting policies Icontinuedl 2.8 Investment properties Investment properties are valued at their fair value al the balance sheet date. 2.9 Debtors Other debtors are recognised at the settlement amount due. Prepayments are valued at the amount prepaid. 2.10 Cash at bank and in hand Cash at bank and in hand includes cash and short temi highly liquid investments wth a short maturity of three months or less from the dale of acquisition or opening of the deposit or similar account. 2.11 Croditors and provisions Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds lo a third party and the amount due lo settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due. 2.12 Financial instrumonts The charity On￿ has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured al their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method. 2.13 Recoupment Order The Charity is subject to a Recoupment Order made by the Charities Commission on 13 May 1993 in respect of payments out of the permanent endowment expended on Phase 11, Cutbush & Corrall Court. Payment of up to £555,000 was permilled, bul it has been agreed with the Charity Commissioners that only £365,000 has been used. The recoupment period Is 60 years and therefore, £6,083.33 per annum has been sel aside and invested in shares each year. The income arising from these Investments will not fomi part of the permanent endowment itself, but can be expended by the charity as General Fund Income. 2.14 Pensions The charity operates a defined contribution plan for the benefit of its employees. Contributions are expensed as they become payable. Page 17 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Accounting policies Icontinuedl 2.15 Fund accounting The Accumulated Income Fund comprises unrestricted funds which can be used in accordance with the charitable objects at the discretion of the Trustees. The Extraordinary Repair Fund and the Development Fund are designated funds, sel aside by the Trustees out of unrestricted general funds for specific future purposes. The Reslricled Grant Income Fund represents grant monies received from the Homes and Communities Agency towards the building costs of the new almshouses al Huntsmans Cottage and the renovation of the almshouses al Harrielsham and St Faith's Street. The charity has undertaken to continually provide services In accordance with the Standards of Almshouse Management and the grants are repayable If the conditions are not met. The Permanent Endowment Fund is a restricted fund held on trust to be retained for the benefit of the Charity as a capital fund. The income from assets held in all of the above funds fomis part of the unrestricted funds. Further explanation of the nature and purpose of the designated funds is included in the notes lo the financial stalemenls. Critical accounting ostimates and areas of judggmgnt The following judgements (apart from those involving eslimalesl made in the process of applying the above accounting policies that have the most significant effect on amounts recognised in the financial slalements. Critical accounting estimates and assumptions.. The eslimaled useful lives of the almshouses and other properties. There are no further key assumptions concerning the future or other key sources of estimation uncertainty al the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and Iiabililies within the next financial year. Income from donations andlogacies Unrostrictod funds 2021 Total funds 2021 Total funds 2020 Legacies 2,000 2,000 Page 18 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Income from ¢haritablo activities Unrostricted funds 2021 Total funds 2021 Total funds 2020 Weekly maintenance contributions Residents, Trips and Activities 665,142 304 665.142 304 674.037 139 Totsl 2021 665,446 665,446 674, 176 Total 2020 674,176 674, 176 Investmgnt incomg Unrestrictod funds 2021 Total funds 2021 Total funds 2020 Rent re￿1Vable- St Mary's Romney Marsh Dividends and interest receivable Deposit interest receivable 300 104,9Q4 438 104,449 422 104,449 422 Total 2021 104,871 104,871 105,642 Total 2020 105,642 105, 642 Page 19 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Other incoming rgsources Unrostricted funds 2021 Total funds 2021 Total funds 2020 HMRC interest Government grants -apprenticeship grant Room hire Government grants - Coronavirus job retention scheme 1,000 35 915 Total 2021 1, 953 Total 2020 1,953 1,953 Analysls of expendlture Activities undertaken directty 2021 Support costs 2021 Total funds 2021 Total funds 2020 Charitable activities Raising funds 608,344 126.908 3,337 735,252 3.337 665.292 2,821 Total 2021 608,344 130,245 738,589 668, 113 Total 2020 553,286 114,827 668, 113 Page 20 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Analysis of expendituro {continugd} Analysis of direct costs Charitable activities 2021 Total funds 2021 Total funds 2020 staff costs Christmas Bounties lo individuals Water, light, heat and insurance Repairs and improvements Gardening Professional Fees Sundries Christmas Party Residents. Iripslaclivitiesldiscretionary payments Telephone Rates ￿. Empty Properties Motor running expenses Depreciation Charge Bank Charges 130,029 6,950 84,884 228,822 44,493 12,419 8,496 2,627 6,526 1,257 4,973 5,400 89,533 1,935 130.029 6,950 64,884 228.822 44.493 12,419 8,496 2.627 6.526 1,257 4,973 5.400 89.533 1,935 113,691 6,800 68,433 181,367 41,916 31,944 3,972 1,398 2,527 2,958 7,343 89,335 1,662 Totsl 2021 608,344 608.344 553,286 Total 2020 553,286 553,286 Page 21 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Analysis of expendituro {continugd} Analysis of support costs Charitable activities 2021 Raising funds 2021 Total funds 2021 Total funds 2020 staff costs {by estimated time spent) Water, light, heat and insurance (by eslimaled usagel Repairs and improvements (by estimated usagel Professional Fees (by eslimaled time spent) Sundries Iby estimated usage) Telephone (by ests'maled usage) Insurance Iby estimated usage) Staff training (by nature of training) Governance costs (see below) Depreciation (by estimated usage) Computer expenses Iby estimated usage) 77,355 710 78.065 73,757 5,973 60 6,033 3,081 4,456 821 8,958 2,257 45 4,501 864 9.430 2,280 3,609 791 6,966 3,045 8T 43 472 23 930 17,537 2,071 6,550 930 19.434 2,092 6,616 320 16,688 2,992 4,391 1,897 21 66 Total 2021 126,908 3,337 130.245 114,827 Total 2020 112, 006 2,821 114.827 Governance costs Charitable activities 2021 Raising funds 2021 Total funds 2021 Total funds 2020 Auditors, remuneration slalutory audit services (by eslimaled time spent) Auditors, remuneration - other serVI￿S (by estimated lime spent) Trustee. indemnity insurance (by eslimaled usage) 6,646 738 7.384 6,908 10,382 1,154 11,536 9.291 509 514 489 Total 2021 17,537 1,897 19,434 16,688 Total 2020 15,063 1,625 16,688 Page 22 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 10. Auditors. remuneration 2021 2020 Fees payable lo the Charity's auditor for the audit of the Charity's annual accounts 7,384 6,908 Fees payable lo the Charity's auditor in respect of. All non-audil services not included above - accounts preparation, lax compliance and general advi 11,536 9,291 11. Staff costs 2021 2020 Wages and salaries Social security costs Contribub'on to defined contribution pension schemes 187,392 11,827 8,875 168,9Q3 10,799 1, 746 208,094 187,448 The average number of persons employed by the Charity during the year was as follows.. 2021 No. 2020 No. Charitable activities Management and Administration of the Charity No employee re￿iVed remuneration amounting lo more than £60,000 in either year. 12. Trustees. remuneration and expenses During the year, no Trustees received any remuneration or other benefits (2020- £NIL). During the year ended 31 December 2021, no Trustee expenses have been incurred (2020- £NIL). Page 23 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 13. Tangiblo fixed assets Freehold Other Computer Property Equipment Freehold Almshouses Total Cost or valuation At 1 January 2021 Additions ,913,134 105,235 208,295 5,254 9,126,683 105,235 At 31 December 2021 9,018.369 208.295 5,254 9.231,918 Depreciation At 1 January 2021 Charge for the year 1.483.658 89,532 19.785 1,042 2,536 1,051 1.505,979 91,625 At 31 December 2021 1,573,190 20,827 3,587 1,597,604 Net book value At 31 December 2021 7,445,179 187,468 1,667 7,634,314 At 31 December 2020 7,429,476 188,510 2,718 7,620, 704 Page 24 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 14. Fixed assot investmgnts Listed Investments Cost or valuation At 1 January 2021 Additions Revaluations 3,752,046 40,792 512.744 At 31 December 2021 4.305.582 Net book value At 31 December 2021 4.305.582 At 31 December 2020 3, 752,046 15. Debtors 2021 2020 Due wlthln one year Other debtors Prepayments and accrued income 19,069 14,402 13.866 14,423 33,471 28,289 16. Creditors: Amounts falling due within one year 2021 2020 Trade creditors Other taxation and social security Other creditors Accruals and deferred income 11,082 5,312 1,473 22,180 4,013 27.532 40,047 31,545 Page 25 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 17. Financial instruments 2021 2020 Flnanclal assets Financial assets measured at fair value through ineome and expenditure 4,305,582 3, 752,046 Financial assets measured at fair value through Income and expenditure comprise fixed asset investments valued at their fair value of £4,305,582 al the year end. Page 26 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 18. ststgmgnt offunds ststgmgnt offunds- currentyear Balance at 31 December 2021 Balance at 1 January 2021 Transfers inlout Gainsl {LossgsI Incomo Exponditurg Unrestrlcted funds Designated funds Extraordinary repair fund Development fund 1,244,277 164,671 1,408,948 502,342 185,818 14,237 702,397 1.746,619 185.818 178.908 2,111.345 General funds Accumulated Income fund 6.428,635 772.317 1738.589) 1191,9011 39,102 6,309.564 Total Unrestricted funds 8.175,254 772.317 1738.589) 16.0831 218.010 8,420.909 Endowment funds Pemanenl endowment 2,246,792 6,083 294,734 2,547,609 Restricted funds Grant income fund 1,588,395 1,588,395 Total of funds 12,010,441 772,317 738,589) 512,744 12,556,913 Page 27 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 18. ststgmgnt offunds Icontinuedl ststgmgnt offunds- prioryear Balance al 31 December 2020 Balan￿ at l January 2020 Transfers in/out Gainsl (Losses) Income Expenditure Unrestrlcted funds Designated funds Extraordinary repair fund Development fund 1. 178, 652 171, 721 65,625 11,039 f,244,277 502,342 319,576 1,350,379 319,576 76,664 1, 746,619 General funds Accumulated Income fund Fair value reserve 6,545,166 781, 771 (668, 113) (325,659) 95,470 6,428, 635 50,000 (So,(￿0) 6,595,166 781, 771 (668, 113) (325,659) 45,470 6,428, 635 Totsl Unrestricted funds 7,945,545 781, 771 (668, 113) {6,083) 122, 134 8, 175,254 Endowment funds Permanent endowment 2,478.495 6,083 (237, 786) 2.246, 792 Restricted funds Grant income fund 1,588,395 1,588,395 Total of funds 12,012,435 781, 771 (668, 113) (115,652) 12,010,441 Page 28 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 19. Summary of funds Summary of funds- curront year Balance at 31 December 2021 Balance at 1 January 2021 Transfers inlout Gainsl {LossgsI Incomo Exponditurg Designated funds 1,746,619 6,428,635 185,818 738,589) 1191,9011 178,908 39,102 2,111,345 6,309,564 General funds 772,317 Endowment funds Reslricled funds 2.246,792 6.083 294.734 2,547.609 1.588,395 1,588.395 12,010,441 772,317 738,5891 512,744 12,556,913 Summary of funds- prior ygar Balance al 37 Decen7ber 2020 Balan￿ at 7 January 2020 Transfers in/out Gains/ (Losses) Income Expenditure Designated funds General funds Endowment funds Reslricled funds 1,350,379 6,595, 166 319,576 (668, 113) (325, 659) 76,664 45,470 1, 746,619 6,428,635 781, 777 2,478,495 6,083 (237, 786) 2,246, 792 1,588,395 1,588,395 12,012,435 181, 7T1 (668, 113) (115,652) 12,010.447 Page 29 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 19. Summary of funds Icontinuedl The Extraordinary Repair Fund is maintained out of the income of the Charity for the purpose of providing for the extraordinary repair, improvement or rebuilding of the homes and other property belonging lo the Charity. The Trustees have decided that the balance on this fund is lo be held al approximately £1,000,000. An annual transfer Is made to this fund from the accumulated income fund If the Trustees consider it necessary. The Development Fund represents amounts set aside for future almshouse developments. £185,818 12020.. £319,576) has been transferred lo this fund from the Accumulated Income Fund during the year as agreed by the Trustees. The Reslricled Grant Income Fund represents grant monies received from the Homes and Communities Agency towards the building costs of the new almshouses at Huntsmans Cotlage and the renovation of the almshouses al Harrietsham and Sl Faith's Street. The charity has undertaken lo continually provide services In accordance with the Stsndards of Almshouse Management and the grants are repayable If the conditions are not met. The Permanent Endowment Fund is a restricted fund held on trust to be retained for the benefit of the Charity as a capital fund. The annual transfer in lo the Permanent Endowment Fund amounting to £6,08312020.' £6,083) has been made in accordance with a Recoupment Order. See note 2. 13 for more Information. 20. Analysis of net assots between funds Analysis of net assots between funds - current year Unrostricted funds 2021 Restricted Endowment funds funds 2021 2021 Total funds 2021 Tangible fixed assets Fixed asset investments 5,851,252 1,958,723 650,981 140,0471 1,588,395 194,667 2,346,859 6,083 7,634.314 4,305.582 657.064 140,0471 Current assets Creditors due within one year Total 8,420,909 1,588,395 2,547,609 12,556.913 Page 30 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 20. Analysis of net assots between funds {continugdl Analysis of net assots between funds - prior year Unrestricted funds 2020 Restricted Endowment funds funds 2020 2020 Total funds 2020 Tangible fixed assets Fixed asset investments Current assets Creditors due within one year 5,831,559 I,T40,624 634,616 (31,545) 1,588,395 200, 750 2,011,422 34, 620 7, 620, 704 3, T52,046 669,236 (31,545) Total 8, 175,254 1,588,395 2,246, T92 12,0lQ,447 21. Reconciliation of net movement in funds to net cash flow from operating activities 2021 2020 Nel incomelexpendilure for the year (as per Statement of Financial Activib"esl 546,472 (1,994) Adjustments for: Depreciation charges IGainslllosses on investments Dividends, interests and rents from investments Increase in debtors Increase in creditors 91,625 1512,7441 1104,8711 15,1821 8,502 91,427 115.652 (105,642) (3, 768) 4,630 Net cash provided by operating activities 23,802 100.305 22. Analysis of cash and cash equivalents 2021 2020 COIF Charities Deposit Fund Bank Current Account Cash in Hand 167,052 456,145 396 161,032 472,959 956 Total cash and cash equlvalents 623,593 640,947 Page 31 THE CUTBUSH & CORRALL CHARITY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 23. Analysis of changes in net debt At1 January 2021 Cash Ilows At31 December 2021 Cash at bank and in hand 640,947 17,3541 623,593 640.947 117,3541 623.593 24. Commitments At 31 December 2021 the Charity had no capital commitments12020. £Nill. 25. Contingent liabilities On the 13th July 2020 the Charity sold some land known as St Mary in the Marsh. Transfer of tille deeds after completion of sale was declined by HM Land Registry due to a restriction within the title deeds, that required the Charity to obtain aulhorisation by an order of the court or of the Charity Commission, in order lo dispose. This is an ongoing matter that the Trustees ao trying lo resolve. Should the outcome be that the transaction is reversed, the Charity could be liable lo repay the sale proceeds, which amount lo £140,000. As the outcome of this matter in uncertain, no liability has been recognised on the balance sheet. 26. Pension commitments The charity operates a defined contribution pension plan for its employees. The amount recognised as an expense in the year was £8,87512020". £7,74SI. The defined contribution expense is allocated to unreslricled funds, of which £3212020. £291 has been allocated to raising funds and £8,843 12020". £7,717> has been allocated to charitsble activities on the basis of the time spent on each activity by staff members. 27. Related party transactions During the year the Charity paid £1,85412020". £1,930) for cleaning services provided by M Brown, who is daughter of Mrs E Abi-Aad, the Charity's Chief Officer and Clerk. This arm's-lenglh arrangement was subject lo assessment and approval by the Trustees. 28. Post balance sheet events There were no adjusting or non-adjusting events occurring between the year end and the dale of approval of these accounts which require disclosure. Page 32 Audit for the year ended 31 December 2021 For Presentation to the Finance Committee & Trustees **Now, for tomorrow** ## **Contents & key contacts** |Introduction|1| |---|---| |Independence & responsibilities|2| |Matters arising from the audit|3| |Audit findings|5| |Audit misstatements|9| **Audit Partner** Duncan Cochrane-Dyet (0)1227 250 404 Duncan.Cochrane-Dyet@mhllp.co.uk **Audit Manager** Craig Styles (0)1227 602 312 Craig.Styles@mhllp.co.uk . We have pleasure in setting out in this report our comments and recommendations on various matters which came to our attention during the course of the audit of the financial statements of The Cutbush and Corrall Charity (also referred to as ) for the year ended 31 December 2021. In order to comply with the provisions of International Standards on Auditing we are required to report to you our audit findings and in particular: - The nature and the scope of audit work we have undertaken - Views about the qualitative aspects of your accounting practices and financial reporting - Unadjusted and adjusted misstatements MHA MacIntyre Hudson Victoria Court 17-21 Ashford Rd, Maidstone, ME14 5DA T: 0333 010 0221 ## _**Rated in top 5 for overall service in 2017 survey of auditors**_ - Matters specifically required by Auditing Standards to be communicated to those charged with governance (such as fraud and error) - Expected modifications to our auditor s report - Material weaknesses in the accounting and internal control systems and - Any other relevant and material matters relating to the audit. This report has been prepared for the sole use of the finance department, on behalf of the Trustees in line with the C , and must not be shown to third parties without our prior consent. No responsibilities are accepted by MHA MacIntyre Hudson towards any party acting or refraining from action as a result of this report. We would be grateful if you will in due course advise us what action you propose to take on the recommendations in the report and also if you would like our further assistance on these or any other matters. Finally, we would like to express our thanks to all the Charity's officers and staff who assisted us in carrying out our work particularly Liz Abi-Aad and her team. 1 ## **2.1 Independence** Auditing Standards require us to communicate at least once a year regarding all relationships between MHA MacIntyre Hudson and the Charity that may reasonably be thought to have a bearing on our independence and objectivity. We have reviewed our independence, including consideration of whether: - The firm is dependent on the Charity as a client due to the significance of the audit fee to the firm - The firm is owed significant overdue fees - There is any actual or threatened litigation between the firm and the Charity - Any benefits have been received by the audit team which are not modest - The firm has any mutual business interest with the Charity - Any members of the audit team have any personal or family connections with the Charity or officers; or - Independence is impaired through the provision of services other than the statutory audit. During the audit we have provided non-audit services to the Charity in the form of accountancy services. We have assisted in the completion process of the Financial Statements, in doing so we have not undertaken a management function and our work has been purely mechanical. The accountancy services were also provided by a separate team and department, the accounts process is managed by an accounts manager who is independent from the audit team, and we consider informed management to be in place. We also assist with compliance work when required. This service is provided by the accounts manager who has no involvement with the audit work. Other than the aforementioned, we have not identified any further threats to our independence and have concluded that the identified safeguards operated as expected. We can therefore confirm that MHA MacIntyre Hudson is independent within the meaning of regulatory and professional requirements. ## **2.2 Limitations** Our audit procedures, which have been designed to enable us to express an opinion on the financial statements, have included the examination of the transactions and the controls thereon of the Charity. The work we have done was not primarily directed towards identifying weaknesses in the Charity opinion, nor to the detection of fraud. We have included in this report only those matters that have come to our attention as a result of our normal audit procedures and, consequently, our comments should not be regarded as a comprehensive record of all weaknesses that may exist or improvements that could be made. To a certain extent the content of this paper comprises general information that has been provided by, or is based on discussions with, management and staff. Except to the extent necessary for the purposes of the audit, this information has not been independently verified. ## **2.3 Responsibilities** Financial Statements. MHA MacIntyre Hudson as auditors of the Charity are responsible for forming an opinion on those Financial Statements, as detailed in our engagement letter. 2 ## **3.1. Audit Approach** In the conduct of our audit, we have not had to significantly alter or change our audit plan, which we communicated to you in our Audit Planning Letter dated 28 March 2022. ## **3.2. Matters identified at the planning stage** The key areas of audit focus which we had identified as part of our overall audit strategy and how they have been resolved, are as follows: ||**Audit area and key risks as presented**|**Our approach as presented**|**Resolution**| |---|---|---|---| |**1**|Revenue Recognition|Revenue could be materially misstated due to
cut-off errors, where weekly maintenance
contributions receive either side of the year
end are allocated to the incorrect accounting
period.
Income could be misappropriated if not
recognised in full in the financial statements,
which could indicate fraud.|We reviewed cut-off for a sample of transactions to
check whether revenue received either side of the
year end is recognised in the correct accounting
period.
We also performed a proof in total of weekly
maintenance contributions and tested a sample of
contracts.| |**2**|Management Override|Risk of the
statements or commit fraud.|We tested a sample of material journals that do
not appear to be part of the routine transaction
cycle.
We reviewed significant accounting estimates and
judgments made by management when preparing
the financial statements.| 3 **----- Start of picture text -----**
Audit area and key risks as presented Our approach as presented Resolution
**----- End of picture text -----**
|**Audit area and key risks as presented**
**Our approach as presented**
**Resolution**|**Audit area and key risks as presented**
**Our approach as presented**
**Resolution**|**Audit area and key risks as presented**
**Our approach as presented**
**Resolution**|**Audit area and key risks as presented**
**Our approach as presented**
**Resolution**| |---|---|---|---| ||||| |**3**|Previous sale of land at St Mary in the Marsh





|HM Land Registry have declined to process
the recent sale of this land by the Charity, due
to restrictive covenants outlined in the title
deeds that have not been met. There is risk of
the transaction being reversed and the Charity
repaying the proceeds.|We obtained copies of correspondence between
the Charity and relevant parties to assess the
likelihood of a liability arising.| ## **3.3. Matters identified during the audit** We have identified recommendations in section 4.5 of this report. We have not identified any further significant matters during the course of the audit. ## **3.4. Audit Status** The audit work on the financial statements is now substantially complete and we anticipate issuing an unqualified audit opinion for the year ended 31 December 2021 for the Charity, following: - Receipt of approved Trustees Report and Financial Statements signed by the Board; - Receipt of a signed letter of representation (provided under a separate cover); - Receipt of outstanding bank confirmations. ## **3.5.** ## **Letter of representation** We have forwarded a letter of representation for your review and approval, as part of your overall review of the Trustees Report and Financial Statements. It is important that this is then reviewed and approved by included non-standard representations related to: - Restricted fund balances as at the year end; - Accuracy of useful economic life estimates used for depreciating tangible fixed assets, in respect of the almshouses; - . 4 ## **4 - Audit findings** ## **4.1 Audit misstatements** In accordance with International Standards on Auditing we are required to report any material adjusted audit misstatements arising from our work. We are also required to report any unadjusted audit misstatements and These are both set out in Section 5. We have reviewed the Charity financial statements, and confirm that they are appropriate to provide relevant, reliable, comparable and understandable information whilst recommendations have been made below for how improvements could, in our opinion, be made. ## **4.4 Accounting estimates** ## **4.2 Risk of fraud and error in the financial statements** We are required under International Standards on Auditing to consider fraud risk throughout the audit. In particular, we must consider management arrangements for preventing and detecting fraud and error. Fraud risks may include asset sales at under value, suppliers over billing for goods or services, misappropriation of assets and cheque frauds, as well as manipulation of financial results. Our work has not identified any matters which we wish to draw to your attention. ## **4.3 Accounting policies** As auditors, we are aware that the selected basis of an accounting estimate may have a significant impact on the financial statements so in our work we need to identify all accounting estimates and the basis of the estimate and, where we consider there to be a high estimation uncertainty, we must ensure our audit work challenges the basis of the estimate. We are also required to consider the outcome of accounting estimates in prior periods as a basis for our risk assessment in the current year. significant accounting estimates are made in respect of depreciation of fixed assets. We have reviewed the accounting estimates for the Charity and conclude that they have been calculated on a basis that is consistent with our knowledge of the Charity and expectations. Financial Reporting Standard FRS102 and FRS102 Charities SORP, requires that entities should review their accounting policies regularly to ensure that they are appropriate to their particular circumstances for the purpose of giving a true and fair view. 5 ## **4 - Audit findings** ## **4.5 Significant deficiencies in internal control** We have set out below significant deficiencies in internal control which came to our attention during the course of our audit work, as defined by ISAs. This does not constitute a comprehensive statement of all deficiencies that may exist in internal controls or of all improvements which may be made and has addressed only those matters which have come to our attention as a result of the audit procedures performed. An audit is not designed to identify all matters that may be relevant to you and accordingly the audit does not ordinarily identify all such matters. We have prioritised our recommendations into the following categories: - High Priority matters that we consider fundamental, against which management should take action as soon as possible; - Medium Priority matters that we consider significant, that should be addressed within a reasonable / defined timeframe; and - Low Priority matters that merit attention and would improve overall control or are options to promote better or more efficient practice. **----- Start of picture text -----**
Observation & Risk Recommendation Management Response
1 S
High Priority
During the year ended 31 December 2020, the From our work we observe that the Trustees are The Charity s solicitor is currently dealing
Charity sold this property, however the Land seeking to resolve this matter and taking the with this matter.
Registry have declined the request for appropriate legal advice. We have not further
transferring the title deeds to the new recommendations to make, as full disclosure has
proprietor, due to the restriction on the Title been made in the accounts of the contingent
Deeds that the Land Registry states requires liability.
authorisation from the Charity Commission or
by order of the court. There is a risk that the
Charity could be liable to repay the proceeds to
the new proprietor in the event the transaction
is reversed. We acknowledge that this matter is
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6 ## **4 - Audit findings** ||**Observation & Risk**|**Recommendation**|**Management Response**| |---|---|---|---| |2|**Useful Economic Lives of Tangible Fixed**
**assets**
**Low Priority**
The accounting policy adopted by the Charity in
respect of depreciation on tangible fixed assets
is that the useful economic lives of those assets
range from 75-300 years, which extends
beyond that which would normally be estimated
in comparable charities. This is not technically
incorrect however. We also note that the value
of land has not been excluded when calculating
depreciation. Accounting standards require that
the value of land should be excluded when
calculating depreciation on freehold property.|We recommend the Trustees revisit the estimate of
the useful expected life, and deduct the value of
land before charging depreciation on tangible fixed
assets.
The value of land can be arrived at by completing
valuations or can be estimated by the
Trustees using internal research, such as
comparable analysis with similar property / land
available on the market, providing the data is
reliable.|The Charity will address this issue during
2022.| |3|**Land Registry Title Deeds**
**Low Priority**
Some title deeds for properties owned by the
Charity that are filed with HM Land Registry
have the incorrect proprietor address (the
Charity)**.**|We recommend the Charity investigates the
incorrect addresses for all title deeds and updates
HM Land Registry where required.|The Charity will address discrepancies on
the Land Registry.| 7 ## **4 - Audit findings** **----- Start of picture text -----**
Observation & Risk Recommendation Management Response
**----- End of picture text -----**
|**Observation & Risk**
**Recommendation**
**Management Response**|**Observation & Risk**
**Recommendation**
**Management Response**|**Observation & Risk**
**Recommendation**
**Management Response**|**Observation & Risk**
**Recommendation**
**Management Response**| |---|---|---|---| ||||| |4|**Charity Commission Register Search -**
**Linked Charities**
**Low Priority**
As part of our search of the Charity
Commission register, we found there were 4
linked Charities. We understand these Charities
are dormant and that all activities are enacted
within the Cutbush & Corrall Charity.|We recommend the Charity seeks to strike off the
dormant charities and updates the Charity
Commission Register to delink them dormant
Charities. The procedure for strike off depends on
the governing deed for each charity, and delinking
can then be done by submitting a written request
to the Charity Commission.|The Charity will look into the issue.| ## **4.6 Matters from last year re-raised** Three points raised in our audit findings report last year have not been resolved: Sale in the Marsh, incorrect address registered on title deeds and linked Charities registered with the Charity Commission. ## **4.7 Matters from last year now resolved** One matter raised last year was resolved and no longer included in our recommendations. This was in respect of , which required updating and reformatting. 8 ## **5 - Audit misstatements** We are required to report all adjustments that management have corrected that we believe should be communicated to the Trustees to assist them in fulfilling their governance responsibilities. We are also required to communicate all unadjusted misstatements, other than those that we believe are clearly trivial, to Trustees. ## **ADJUSTED MISSTATEMENTS** Audit adjustments have been agreed and posted to the financial statements as listed on the separate schedule of audit adjustments. This does not include adjustments made by the accounts production department during the process of preparing the financial statements. ## **UNADJUSTED MISSTATEMENTS** Unadjusted differences have been agreed by the Trustees that these are immaterial to the end users of the financial statements and do not require adjusting. 9 **Appendix A: Sector Development** ## **Conclusion** **Duncan Cochrane-Dyet BSc BFP FCA** (0)1227 250 404 ## **E: Duncan.Cochrane-Dyet@mhllp.co.uk** 10 **Now, for tomorrow**