**Charity number 226621**
**The Friendly Societies Convalescent Scheme** (formerly The Friendly Societies Convalescent Home)
**Trustees' Report and Accounts**
**31 December 2021**
## **The Friendly Societies Convalescent Scheme Trustees' Report and Accounts Contents**
||**Page**|
|---|---|
|**Reference and administration details**|**1**|
|**Trustees' report**|**2 - 4**|
|**Statement of Financial Activities**|**5**|
|**Balance sheet**|**6**|
|**Notes to the accounts**|**7 - 11**|
|**Independent Examiner's Report**|**12**|
1
## **The Friendly Societies Convalescent Scheme**
## **Reference and Administration Details**
## **Trustees**
Mrs Janet M. Clements - Chairman Mrs Joanne Andrew (appointed 5 March 2021) Mrs Dorothy Deacon Mr Ken Demby (resigned 5 March 2021) Mrs Janet Lewis (appointed 5 March 2021) Mr John Potton Mr Peter Saunders Mr Basil Stanley Mrs Angela Stanley
## **Independent Examiner**
Mr Daniel Valentine ACA Begbies Old Printers House Stone Street Cranbrook TN17 3HF
## **Bankers**
Nat West 140 High Street Herne Bay Kent CT6 5JX
## **Solicitors**
Bull and Bull 98 Thomas Way Lakesview International Business Park Hersden Canterbury CT3 4NH
## **Principal Address**
PO Box 552 Ashford Kent TN23 9UT
**Charity registered number**
226621
2
**The Friendly Societies Convalescent Scheme** (formerly The Friendly Societies Convalescent Home)
## **Trustees' Report for the year ended 31 December 2021**
The Trustees present their report and accounts for the year ended 31 December 2021.
The Trustees confirm that the Annual Report and accounts have been prepared in accordance with the accounting policies set out in Note 1 to the accounts and comply with the charity's governing document, The Charities Act 2011 and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard FRS 102 applicable in the UK and Republic of Ireland published on 16 July 2014.
## **Structure, governance and management**
The charity is set up by constitution and operated by the Board of Trustees. New trustees are interviewed and appointed by the Board.
## **Risk management**
The Trustees have identified the major risks which the charity faces and consider that all necessary action has been taken to manage those risks.
## **Objectives and activities for the public benefit**
The charity's original object was to provide convalescent treatment for members of friendly societies through its convalescent home in Herne Bay.
Following the sale of the charity's convalescent home in August 2010, the Trustees reviewed their objectives and activities with the Charity Commission and the charity's revised objects, under a scheme dated 20 May 2015, are the relief of sickness and the preservation of health of the public, in particular but not exclusively to assist members of Friendly Societies by providing grants to help in the provision of facilities and support services.
The Trustees confirm that they have continued to comply with their duty in Section 17 of the 2011 Charities Act to have due regard to the Charity Commission's public benefit guidance.
## **Grant making policy**
The trustees' policy is to support any persons with financial grants towards the cost of convalescence. Applications must be supported by a medical report from a hospital or doctor supporting the need for a convalescent stay. The trustees will also consider a grant towards the cost of a carer staying with the patient on convalescence.
The trustees also provide grants towards the costs of a shortfall in convalescent claims to the Oddfellows and Foresters Friendly Societies. A system is place through the Societies whereby the applications are approved following medical certification. From November 2020 the trustees will pay 100% of any shortfall up to £500 per week, up to 2 weeks per annum.
No claims have been refused. These claims require a medical certificate signed by a Doctor. The trustees continue to explore ways of extending the guest programme.
## **Trustees' report and financial review**
In 2021 the country was still coming to terms with the effect of COVID on our way of life. Those who were considered clinically vulnerable did not relish going out and certainly not staying in unfamiliar surroundings. Even when convalescent homes re-opened they imposed stricter criteria on those guests going to stay, which meant that some simply preferred to convalesce in their home homes.
So, despite our best efforts to encourage guests to take opportunities to stay away from home the number of claims remained very low.
We continued to plan new and different ways of promoting ourselves and realise this will take a time to filter through.
In anticipation of an upsurge in demand and with interest rates very low we kept our rates at £500 per person per week, up to 2 weeks per annum. Looking at each case on an individual basis. We supported Alice’s escapes again with their scheme for convalescence for children.
3
**The Friendly Societies Convalescent Scheme** (formerly The Friendly Societies Convalescent Home)
## **Trustees' Report for the year ended 31 December 2021**
Total income for the year was £40,216 (2020: £42,268) and total expenditure was £64,157 (2020: £54,500). Net gains on investments amounted to £205,940 (2020: £11,922) resulting in net surplus for the year of £182,199 (2020: net deficit of £310). At 31 December 2021 total funds were £2,380,449 of which £168,161 were unrestricted.
## **Investment policy and performance**
The management of the investment portfolio is governed not only by a Client Agreement Letter (September 2013) but also by a Written Investment Policy Statement (“WIPS”) dated 31st July 2012. The WIPS can be summarised as follows:
The Trustees have chosen as their investment objective a Balanced return (between income and capital growth) and to maintain the capital value at least in line with inflation. An appropriate mix of assets within certain ranges has been agreed (as revised 10th July 2014).
In terms of risk, the Trustees have a moderate level of tolerance and have directed the Managers to have due regard for the suitability of the investments held and the need for diversification (including the stipulation that no non-collective investment should exceed 8% of the value of the portfolio). The investment portfolio produced a total return of 10.7% net of fees (11.6% gross), compared to 12.5% for the benchmark in 2021. Global equity markets continued to see strong returns from their pandemic lows of March 2020. The road to recovery however was not a simple one and a number of unknowns caused concern for investors. These included questions around the economic implications of the then new Omicron variant, rising inflation, supply chain bottlenecks and their likely persistence and the outlook for central bankers moving to limit monetary support. Investec maintain their approach of diversifying across geographies and companies and believe that their philosophy of buying and holding high-quality companies will continue to offer excellent prospects for longer term investment growth.
## **Reserves policy**
The Trustees are aware that the reserves are growing and are seeking more options to increase grants. Their aim is that 50% of their annual income should go towards grants, and that they should hold the income for 2 years in reserve to give continuity should their investments underperform.
## **Trustees' responsibilities**
The Trustees are responsible for preparing the Trustees' report and accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Charity law requires the Trustees to prepare accounts for each financial year which give a true and fair view of the state of affairs of the charity and of its incoming resources and application of resources of the charity for that period. In preparing these accounts, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- prepare the accounts on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
4
## **The Friendly Societies Convalescent Scheme**
(formerly The Friendly Societies Convalescent Home)
## **Trustees' Report**
## **for the year ended 31 December 2021**
The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the accounts comply with the Charities Act 2011. 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.
## **This report was approved by the Trustees on 20 October 2022**
## **Mrs Janet M Clements**
**Chairman**
5
## **The Friendly Societies Convalescent Scheme**
(formerly The Friendly Societies Convalescent Home)
## **Statement of Financial Activities for the year ended 31 December 2021**
|**Notes**
**Income from:**
Investments
**2**
**Total income**
**Expenditure on:**
Raising funds
**3**
Charitable activities
**4**
**Total expenditure**
**Net gains/(losses) on investment assets**
**Net income/(expenditure)**
**Transfers**
Transfers between funds
**Net movement in funds**
**Reconciliation of Funds**
Total Funds at 1 January 2021
**Total Funds at 31 December 2021**|**Permanent**
**Endowment Unrestricted**
**Total**
**Fund**
**Fund**
**2021**
**£**
**£**
**£**
**-**
**40,216**
**40,216**
**-**
**40,216**
**40,216**
**18,161**
**5,785**
**23,946**
**-**
**40,211**
**40,211**
**18,161**
**45,996**
**64,157**
**205,940**
**-**
**205,940**
**187,779**
**(5,780)**
**181,999**
**-**
**-**
**-**
**187,779**
**(5,780)**
**181,999**
**2,024,509**
**173,941**
**2,198,450**
**2,212,288**
**168,161**
**2,380,449**|Permanent
Endowment Unrestricted
Total
Fund
Fund
2020
£
£
£
-
42,268
42,268
-
42,268
42,268
16,112
5,737
21,849
-
32,651
32,651
16,112
38,388
54,500
11,922
-
11,922
(4,190)
3,880
(310)
-
-
-
(4,190)
3,880
(310)
2,028,699
170,061
2,198,760
2,024,509
173,941
2,198,450|
|---|---|---|
The Notes to the Accounts form part of the Financial Statements
6
## **The Friendly Societies Convalescent Scheme**
(formerly The Friendly Societies Convalescent Home)
## **Balance Sheet as at 31 December 2021**
|**Notes**
**Fixed assets**
Investments
- Listed investments
**8**
- Cash held within portfolio
**Current assets**
Debtors
**9**
Cash at bank
**10**
**Creditors: amounts falling due within one**
**year**
**11**
**Net current assets**
**Net assets**
**Represented by:**
Permanent Endowment Fund
Unrestricted Fund
**Total Funds**
**12**|**£**
**£**
**2,280,061**
**92,383**
**2,372,444**
**107**
**26,541**
**26,648**
**(18,643)**
**8,005**
**2,380,449**
**2,212,288**
**168,161**
**2,380,449**
**2021**|£
£
2,156,313
13,136
2,169,449
105
32,366
32,471
(3,470)
29,001
2,198,450
2,024,509
173,941
2,198,450
2020|
|---|---|---|
## **Approved by the Trustees on 20 October 2022**
## **Mrs Janet M Clements Chairman**
The Notes to the Accounts form part of the Financial Statements
7
**The Friendly Societies Convalescent Scheme** (formerly The Friendly Societies Convalescent Home) **Notes to the Accounts for the year ended 31 December 2021**
## **1 Accounting policies**
## _**Basis of preparation and assessment of going concern**_
The accounts have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) published on 16 July 2014, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011.
The accounts have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant note(s) to these accounts.
The charity constitutes a public benefit entity as defined by FRS 102.
The trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern.
## _**Fund accounting**_
The Unrestricted Fund is available for use at the discretion of the trustees in furtherance of the general objectives of the charity.
The Permanent Endowment Fund derives from the sale proceeds of the convalescent home. The Charity Commission lifted the restriction over the sale of the home, permitting its sale, and as a result the proceeds continue to carry the permanent requirement originally attached to the property.
## _**Income**_
All income is recognised once the charity has entitlement to the income, there is sufficient certainty of receipt and so it is probable that the income will be received, and the amount of income receivable can be measured reliably.
Interest on funds held on deposit is included upon notification of the interest paid or payable by the bank. Dividends are recognised upon notification from our investment advisor of the dividend paid or payable.
## _**Expenditure**_
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that settlement will be required and the amount of the obligation can be measured reliably.
All expenditure is accounted for on an accruals basis. All expenses, including support costs and governance costs, are allocated or apportioned to the applicable expenditure headings in the statement of financial activities.
Grants payable are payments made to third parties in the furtherance of the charitable objects of the charity. In the case of an unconditional grant offer, this is accrued once the recipient has been notified of the grant award. Grant awards that are subject to the recipient fulfilling performance conditions are only accrued when the recipient has been notified of the grant and any remaining unfulfilled condition attaching to that grant is outside of the control of the Trust.
Irrecoverable VAT is charged against the expenditure heading for which it was incurred.
The costs of raising funds consist of investment management and an apportionment of support and governance costs
The expenditure on charitable activities includes grants payable and an apportionment of support and governance costs.
8
**The Friendly Societies Convalescent Scheme** (formerly The Friendly Societies Convalescent Home) **Notes to the Accounts for the year ended 31 December 2021**
## _**Fixed asset investments**_
Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their market value as at the balance sheet date using the closing quoted market price. All gains and losses are taken to the statement of financial activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between fair value at the year end and their carrying value. Realised and unrealised investment gains and losses are combined in the statement of financial activities.
The charity does not acquire or use put options, derivatives or other complex financial instruments.
|**2**
**Investment income**
Interest received
Nat West
Investec portfolio
**3**
**Costs of raising funds**
Investment management costs
Support and governance costs (see note 5)
**4**
**Expenditure on charitable activities**
Grants payable (see note 6)
Support and governance costs (see note 5)|**2021**
**£**
**1**
**40,215**
**40,216**
**2021**
**£**
**18,161**
**5,785**
**23,946**
**2021**
**£**
**22,857**
**17,354**
**40,211**|2020
£
73
42,195
42,268
2020
£
16,112
5,737
21,849
2020
£
15,439
17,212
32,651|
|---|---|---|
9
## **The Friendly Societies Convalescent Scheme** (formerly The Friendly Societies Convalescent Home) **Notes to the Accounts for the year ended 31 December 2021**
|**5**
**Analysis of support and governance costs**
**Support costs**
Staff costs (note 7)
PO Box
Storage rental
Computer and website costs
Bank charges
Sundry expenses
**Governance costs**
Independent examination
- Current year
- Prior year under provision
Meeting expenses
Total
**Allocated:**
Costs of raising funds (25%) (note 3)
Charitable activities (75% ) (note 4)
**6**
**Grants payable**
Paid to individuals
Paid to institutions
- Alice's Escapes (charity no 1146011)
**7**
**Staff costs**
Gross salaries
Employer's national insurance|**2021**
**£**
**17,160**
**358**
**1,100**
**395**
**302**
**254**
**19,569**
**3,000**
**570**
**-**
**3,570**
**23,139**
**2021**
**£**
**5,785**
**17,354**
**23,139**
**2021**
**£**
**6,927**
**15,930**
**22,857**
**2021**
**£**
**17,160**
**-**
**17,160**|2020
£
17,160
348
1,100
-
323
692
19,623
3,000
210
116
3,326
22,949
2020
£
5,737
17,212
22,949
2020
£
15,439
-
15,439
2020
£
17,160
-
17,160|
|---|---|---|
The average number of employees during the year was 1 (2020: 1). During the year, no Trustee received any remuneration or benefits in kind (2020: £nil). No trustees received reimbursement of expenses in the year (2020: £nil)
Total emoluments received by the charity's key management personnel was £17,160 (2020: £17,160).
10
## **The Friendly Societies Convalescent Scheme** (formerly The Friendly Societies Convalescent Home) **Notes to the Accounts for the year ended 31 December 2021**
|**8**
**Investments**
**Market value**
At 1 January 2021
Additions at cost
Disposals at carrying value
Net gain on revaluation
**At 31 December 2021**
**Historical cost at 31 December 2021**
**Listed investments at fair value comprised:**
UK fixed interest
Overseas fixed interest
UK equities
International equities
Emerging economies
Property
Alternative assets
Money market instruments
**9**
**Debtors**
Prepayments
**10**
**Cash balances**
Nat West
**11**
**Creditors: amounts falling due within one year**
PAYE & NI
Grants payable
Accruals|**2021**
**£**
**278,262**
**101,806**
**607,758**
**918,708**
**23,593**
**96,735**
**253,199**
**-**
**2,280,061**
**2021**
**£**
**107**
**2021**
**£**
**32,366**
**2021**
**£**
**643**
**15,000**
**3,000**
**18,643**|**Listed**
**investments**
**£**
**2,156,313**
**405,842**
**(477,439)**
**195,345**
**2,280,061**
**1,693,641**
2020
£
320,466
55,995
526,799
797,242
70,217
71,724
188,870
125,000
2,156,313
2020
£
105
2020
£
32,366
2020
£
470
-
3,000
3,470|
|---|---|---|
11
## **The Friendly Societies Convalescent Scheme** (formerly The Friendly Societies Convalescent Home) **Notes to the Accounts for the year ended 31 December 2021**
|**12 Movement in Funds**
**Permanent Endowment Fund**
**Unrestricted Fund**
Movement in Funds
Permanent Endowment Fund
Unrestricted Fund|**B/fwd at**
**C/fwd at**
**1st Jan**
**Gains &**
**31st Dec**
**2021**
**Income**
**Expenditure**
**(losses)**
**2021**
**£**
**£**
**£**
**£**
**£**
**2,024,509**
**-**
**(18,161)**
**205,940**
**2,212,288**
**173,941**
**40,216**
**(45,996)**
**-**
**168,161**
**2,198,450**
**40,216**
**(64,157)**
**205,940**
**2,380,449**
B/fwd at
C/fwd at
1st Jan
Gains &
31st Dec
2020
Income
Expenditure
(losses)
2020
£
£
£
£
£
2,028,699
-
(16,112)
11,922
2,024,509
170,061
42,268
(38,388)
-
173,941
2,198,760
42,268
(54,500)
11,922
2,198,450|
|---|---|
The unrestricted fund is available to be spent for any of the purposes of the charity.
The Permanent Endowment Fund derives from the sale proceeds of the convalescent home. The Charity Commission lifted the restriction over the sale of the home, permitting its sale, and as a result the proceeds continue to carry the permanent requirement originally attached to the property.
|**13 Analysis of Net Assets Between Funds**
Fixed assets investments
Cash at bank
Other current assets
**At 31 December 2021**
Analysis of Net Assets Between Funds
Fixed assets investments
Cash at bank
Other current assets
At 31 December 2020|**Endowment Unrestricted**
**Total**
**Fund**
**Fund**
**2021**
**£**
**£**
**£**
**2,372,444**
**-**
**2,372,444**
**-**
**26,541**
**26,541**
**(160,156)**
**141,620**
**(18,536)**
**2,212,288**
**168,161**
**2,380,449**
Permanent
Endowment
Unrestricted
Total
Fund
Fund
2020
£
£
£
2,169,449
-
2,169,449
-
32,366
32,366
(144,940)
141,575
(3,365)
2,024,509
173,941
2,198,450|
|---|---|
## **14 Related Party Transactions**
There were no related party transactions in the year.
12
## **The Friendly Societies Convalescent Scheme Independent Examiner's Report to the Trustees for the year ended 31 December 2021**
I report to the trustees on my examination of the accounts of Friendly Societies Convalescent Scheme (the charity) for the year ended 31 December 2021 which are set out on pages 4 to 11.
## **Responsibilities and basis of report**
As the charity's trustees you are responsible for the preparation of the accounts in accordance with the requirements of the Charities Act 2011 ('the Act').
I report in respect of my examination of the trustees' accounts carried out under section 145 of the 2011 Act and in carrying out my examination I have followed all the applicable Directions given by the Charity Commissioner under section 145(5)(b) of the 2011 Act.
## **Independent examiner's statement**
I have complete my examination. I confirm that no material matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
- (1) accounting records were not kept in respect of the Trust as required by section 130 of the Act; or
- (2) the accounts do not accord with those records; or
- (3) the accounts do not comply with the applicable requirements concerning the form and content of accounts set out in the Charities (Accounts and Reports) Regulations 2008 other than any requirement that the accounts give a 'true and fair view' which is not a matter considered as part of an independent examination.
I have no matters and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.
## **Daniel Valentine ACA**
Begbies Old Printers House Stone Street Cranbrook Kent TN17 3HF **20 October 2022**