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2021-12-31-accounts

PEACE COTTAGES CHARITY

ANNUAL REPORT AND FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2021

REGISTERED CHARITY NO. 293663

RSL NO. A3648

PEACE COTTAGES CHARITY

REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

CONTENTS

Page Report of the trustees Report of the auditors Statement of comprehensive income Statement of financial position Statement of cash flows 10 Notes to the financial statements 11

PEACE COTTAGES CHARITY REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2021

PAGE 1

ADMINISTRATIVE INFORMATION

The trustees present their annual report and the audited financial statements of the charity for the year ended 31 December 2021.

The charity was established by a trust deed dated 30 December 1899, and is registered with the Charity Commission, No. 293663 and the Homes and Communities Agency, RSL No. A3648. Its address is Barnhill House, Barn Hill, Hunton, Maidstone, Kent ME15 0QT.

The trustees who served the charity during the year were as follows:

Mr R M Sawtell Mrs C A Ellman-Brown. – Deceased 13 June 2021 Mrs E M Oliver Rev P S Callway. – Retired 30 September 2021 Ms F Joyce Mrs C Kennedy ~~S~~ loane Ms L Halliday

The operation of the charity is carried out by the trustees.

Treasurer : I P Pinks Banker: CAF Bank Ltd, 25 Kings Hill Avenue, Kings Hill, West Malling, Kent Auditor: Julie Griggs, Levicks, Chartered Accountants & Business Advisers & Statutory Auditors, Maidstone, Kent.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The charity is run by a small number of volunteer trustees who meet frequently. New trustees are recruited by word of mouth as a vacancy arises. All trustees are required to acquaint themselves with the residents’ handbook and the Almshouses Association handbook which contain details of trustees’ responsibilities and the regulations relating to Almshouses.

The current Trustees wish to record their sincere and heartfelt thanks to Peter Callway and Alison Ellman-Brown for their considerable help and assistance with the running of the charity, over the past years.

OBJECTIVES AND ACTIVITIES

Peace Cottages Charity was established in 1899 as a charity to provide housing for elderly people with a family link to Hunton. The row of five cottages was built as an attractive single story building on the corner of West Street and Bishops Lane, opposite the village primary school. The cottages are currently occupied by four ladies and a gentleman.

As the residents are all of low income, the provision of a cottage by the charity has enabled them to remain within the village, in familiar surroundings, close to family and friends. This provides a degree of community cohesion, as a requirement of the charity scheme is that residents of the cottages must have been previously resident or have a family link in the Parish of Hunton. In addition, as the residents are generally elderly, the cottages provide the benefit of enabling them to retain their independence in their own homes as the cottages are closely supervised by the trustees.

PEACE COTTAGES CHARITY REPORT OF THE TRUSTEES (CONT’D) FOR THE YEAR ENDED 31 DECEMBER 2021

PAGE 2

ACHIEVEMENTS AND PERFORMANCE

There were sixteen meetings of the trustees of Peace Cottages Charity in 2021.

The 5 cottages have been 95% occupied throughout this year and the residents’ contribution remained at £125 a week, as the trustees had decided not to increase maintenance contributions given the financial position of the charity.

Throughout the year, various electrical repairs have been carried out to the cottages including showers, light fittings and ovens. A gardener regularly cuts the grass and carries out minor repairs when necessary and the grass is well kept since the moss has been treated by Green Thumb. The actions highlighted in the 2015 quinquennial inspection, have been completed.

The heating system, installed in 2020 failed to produce a satisfactory system for the residents. This was due to (with hindsight) a mistaken decision by the Trustees and possibly some misselling. The decision was taken to replace the system with a system that provided a night storage facility, as well as an “on demand capability.” The new system was introduced during the summer of 2021 and is currently performing, as expected.

Two Cottages were vacant at various times during the year and the trustees took the opportunity to refurbish those cottages, whilst they were vacant.

PLANS FOR THE FUTURE

The quinquennial review is currently due and the trustees expect to resolve any highlighted problems.

FINANCIAL REVIEW

Total income for the year was £30,970 as detailed in the statement of comprehensive income which is higher than the previous year of £29,301, due the vacancy periods. Assuming the cottages remain fully occupied, it is anticipated that income will remain at a similar level for future years. The trustees are not considering a significant increase, if any, to maintenance contributions for the next year. Any increases would be in line with ‘fair rent’ assessments.

Peace Cottages Charity has built up funds over the recent years to cover future planned projects.

No additional investment holdings were purchased this year. The current holdings continue to generate a modest income and have increased in value, as the various financial markets have fluctuated during the year.

PEACE COTTAGES CHARITY REPORT OF THE TRUSTEES (CONT’D) FOR THE YEAR ENDED 31 DECEMBER 2021

PAGE 3

RESERVES POLICY

It is the policy of the charity to maintain unrestricted funds, which are the free reserves of the charity. This provides sufficient funds to cover management and administration and support costs and to respond to emergency applications for grants which arise from time to time. Unrestricted funds were maintained in excess of 3 years of annual expenditure in anticipation of the required level of funds needed for works and capital expenditure in future years. The trustees are aware that the charity may need to incur substantial capital costs in the future, particularly with regard to the roof, windows and doors and so have maintained the extraordinary repair reserve, at £100,000 to meet these possible requirements.

At the end of 2021 the total reserves were £331,150 (2020 - £301,941) The trustees consider there are no issues with the charity as a going concern.

RISK MANAGEMENT

The trustees have examined the major strategic, business and operational risks which the charity faces and confirm that systems have been established to enable regular reports to be produced so that the necessary steps can be taken to lessen these risks.

TRUSTEES’ RESPONSIBILITIES

The Homes and Communities Agency and charity legislation requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity as at the end of the financial year and of the surplus or deficit for that period.

The trustees have complied with the duty in Section 17 (5) of the 2011 Charities Act to have due regard to guidance published by the Charities Commission in respect of public benefit.

In preparing these financial statements, the trustees are required to:

The trustees are responsible for maintaining adequate accounting records, for safeguarding the assets of the charity and for taking reasonable steps for the prevention and detection of fraud and other irregularities. The trustees are also required to indicate where the financial statements are prepared other than on the basis that the charity is a going concern.

Signed on behalf of the Trustees:

Elizabeth M Oliver

26 April 2022

PEACE COTTAGES CHARITY

PAGE 4

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF PEACE COTTAGES CHARITY

FOR THE YEAR ENDED 31 DECEMBER 2021

Opinion

We have audited the financial statements of Peace Cottages Charity (the 'charity') for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income and Statement of Financial Position, 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

This report is made solely to the charity’s trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity’s trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Basis for opinion

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

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you were:

PEACE COTTAGES CHARITY

PAGE 5

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF PEACE COTTAGES CHARITY (Continued)

FOR THE YEAR ENDED 31 DECEMBER 2021

Other information

The other information comprises the information included in the report of the trustees, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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

We have nothing to report in this regard.

Matters on which we are required to report by exception

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

Responsibilities of trustees

As explained more fully in the trustees' responsibilities statement, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

PEACE COTTAGES CHARITY

PAGE 6

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF PEACE COTTAGES CHARITY (Continued)

FOR THE YEAR ENDED 31 DECEMBER 2021

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

Auditor's responsibilities for the audit of the financial statements

We have been appointed as auditor under section 145 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

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

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

PEACE COTTAGES CHARITY

PAGE 7

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF PEACE COTTAGES CHARITY (Continued)

FOR THE YEAR ENDED 31 DECEMBER 2021

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

61 London Road J A GRIGGS FCA Maidstone LEVICKS Kent Chartered Accountants & Business Advisers ME16 8TX

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2021

Extraordinary Total Total
General Repairs Funds Funds
Fund Reserve 2021 2020
Note £ £ £ £
Social Housing Activity income
Weekly maintenance contributions 1b 30,970 - 30,970 29,301
Hardship Fund - - - (1,440)
______ ______ ______ ______
Total Social Housing Activity 30,970 - 30,970 27,861
income
Social Housing Activity 4 (15,558) - (15,558) (21,601)
expenditure
Extra-Ordinary expenditure 4 - (12,448) (12,448) (31,752)
______ ______ _____ _____
Operating surplus/(deficit) on 15,412 (12,448) 2,964 (25,492)
Social Housing Activities
Other income
Gain/(loss) on investments held 8 18,279 - 18,279 (17,563)
Investment income 5 7,966 - 7,966 8,488
______ ______ ______ ______
Total surplus/(deficit) 41,657 (12,448) 29,209 (34,567)
Transfers 12 (12,448) 12,448
- -
Fund balances b/fwd at 1 January 2021 201,941 100,000 301,941 336,508
______ ______ ______ ______
Fund balances c/fwd at 31 December 2021 231,150 100,000 331,150 301,941
______ ______ ______ ______

PEACE COTTAGES CHARITY PAGE 9

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021

2021 2020
Note £ £ £ £
FIXED ASSETS
Tangible fixed assets 6 38,414 38,414
_ _
38,414 38,414
CURRENT ASSETS
Debtors 7 1,156 1,224
Investments 8 275,395 250,335
Cash at bank and in hand 17,299 16,908
______ ______
293,850 268,467
CREDITORS: Amounts
falling due within one year
9 1,114 4,940
______ ______
NET CURRENT ASSETS 292,736 263,527
_ _
TOTAL ASSETS LESS
CURRENT LIABILITIES 331,150 301,941
_ _
CAPITAL AND RESERVES
Designated reserves 100,000 100,000
Accumulated general reserve 231,150 201,941
______ _
331,150 301,941
______ _

These Financial Statements were approved by the trustees on 26 April 2022

Elizabeth M Oliver Trustee Mrs C Kenndy-Sloane Trustee

PEACE COTTAGES CHARITY PAGE 10 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMER 2021

Note
CASH FLOWS FROM OPERATING
ACTIVITES:
Net cash provided by (used in) operative
activities
10
CASH FLOWS FROM INVESTING
ACTIVITES:
Investment income
Purchase of investments

Net cash provided by (used in) investing
activities
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net cash provided by (used in) financing
activities
Change in cash and cash equivalents in the
year

Cash and cash equivalents at the beginning
of the year
11
Cash and cash equivalents at the end of the
year
11
2021
£
(794)
1,185
-
_

391

-
391
16,908
17,299
2020
£
(22,575)
580
(35,000)
_
(34,420)
-
(56,995)
73,903
16,908

PEACE COTTAGES CHARITY PAGE 11

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

1. PRINCIPAL ACCOUNTING POLICIES

a) Basis of preparation and assessment of going concern

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant notes to these accounts. The financial statements have been prepared in accordance with the ‘Charities Act 2011’, ‘The Accounting Direction for Private Registered Providers of Social Housing from 2019’, the ‘Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers’ effective 1 January 2019 and the ‘Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102) effective 1 January 2022.

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.

b) Income

Income represents weekly maintenance contributions receivable from residents during the year. The weekly maintenance contribution includes water rates. Electricity is paid for by the residents. Contributions were collectable on all five cottages during the year to 31 December 2021.

c) Housing Properties

The cost model is used, properties are maintained in a state of repair such that their estimated residual value is not less than the original cost, therefore no annual charge for depreciation is required.

d) Housing Corporation Grant

The Housing Corporation Grant (HCG) was paid by the Housing Corporation to reduce the cost of development, and is therefore, shown as a deduction from the cost of the properties on the statement of financial position. The HCG is repayable under certain circumstances, primarily following the sale of a property but will normally be restricted to the net proceeds of sale.

e) Current Asset Investments

Current asset investments are stated at market value at the balance sheet date. Any gain or loss on revaluation is taken to the statement of comprehensive income.

f) Cyclical Repairs and Maintenance

Peace Cottages Charity has established a regular programme of cyclical repairs and maintenance. Costs are charged to the revenue reserve in the year in which they are incurred.

PEACE COTTAGES CHARITY PAGE 12

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED 31 DECEMBER 2021

PRINCIPAL ACCOUNTING POLICIES (CONT’D)

g) Extraordinary Repairs

Costs of extraordinary repairs, unless improvements to the properties, are charged to the revenue reserve in the year in which they are incurred.

h) Extraordinary Repairs Reserve

This revenue reserve represents amounts set aside to carry out major repairs, improvements or rebuilding of properties. The amounts set aside are in accordance with that recommended by the National Almshouses Association. The reserve was increased to cover the expected costs arising from the next quinquennial review

i) Value Added Tax

Peace Cottages Charity is not registered for Value Added Tax (VAT). In these financial statements, where applicable, expenditure is shown inclusive of VAT.

j) Investment Income

Income from investments is accounted for on an accruals basis.

k) Expenditure

Expenditure is recognised when there is an obligation for payment and is accounted for gross.

l) Taxation

Peace Cottages Charity is a registered charity and is, therefore, exempt from liability to taxation on its income and capital gains.

PEACE COTTAGES CHARITY PAGE 13

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED 31 DECEMBER 2021

2. ANALYSIS OF STAFF COSTS, TRUSTEE REMUNERATION AND EXPENSES, AND THE COST OF KEY MANAGEMENT PERSONNEL

No trustee or related party to the charity has been paid or is payable remuneration, benefits or expenses from the funds of the charity.

The charity has no employees.

3. AUDIT FEES

The fee charged by the auditor is £1,100 for audit services, VAT inclusive.

4. SOCIAL HOUSING ACTIVITY EXPENDITURE

2021 2020
£ £ £ £
Service Costs
Insurance 1,306 1,193
Water rates 838 1,573
Alarm system 1,358 1,351
Light and heat 1,371 304
Bank charges 110 74
______ ______
4,983 4,495
Management Costs
Audit fee 1,100 1,080
Almshouse Association 142 140
subscription
Sundries 659 145
Reg. Soc. Housing 300 225
subscription
______ ______
2,201 1,590
Maintenance Costs
External maintenance 1,927 1,760
Internal maintenance 6,447 13,756
Repairs maintenance 12,448 31,752
______ ______
20,822 47,268
______ ______
28,006 53,353

PEACE COTTAGES CHARITY PAGE 14

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED 31 DECEMBER 2021

5. INVESTMENT INCOME
2021 2020
£ £
Gross interest receivable from bank deposits - 4
Dividend income 7,966 8,484
_____ _____
7,966 8,488
_____ _____
6. TANGIBLE FIXED ASSETS
Completed
Housing
Properties
£
COST
At 1 January 2021 and 31 December 2021 187,906
______
HOUSING CORPORATION GRANT
At 1 January 2021 and 31 December 2021 (149,492)
______
NET BOOK VALUE
At 1 January 2021 and 31 December 2021 38,414
______

HOUSING PROPERTIES

Peace Cottages were constructed in 1899. There is no record of the original cost and no value is attributed thereto. The above details relate to improvements carried out in 1987 and 1988 in converting the accommodation to provide four single and one double elderly category 1 units. This was funded by a Housing Corporation Grant of £149,492 and a residual mortgage loan of £37,705. The loan was advanced on 31 March 1989 and repaid early on 2 March 2006. The balance of £709 was provided from Peace Cottages Charity own resources.

PEACE COTTAGES CHARITY PAGE 15

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED 31 DECEMBER 2021

7. DEBTORS

2021 2020
£ £
Amounts falling due within one year:
Weekly maintenance contributions and KCC income 299 175
receivable
Prepayments 857 1,049
_____ ______
1,156 1,224
_____ ______

PEACE COTTAGES CHARITY PAGE 16

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED 31 DECEMBER 2021

8. CURRENT ASSET INVESTMENTS

2021 2020
£ £
Market value as at 1 January 2021 250,335 224,994
Additions at cost -
35,000
Accumulated dividends 6,781 7,904
Gain/(Loss) in year 18,279 (17,563)
_____ _____
Market value as at 31 December 2021 275,395 250,335
_____ _____
The investments (all listed) at cost comprise the following:-
(2021: 47,366.583) M&G Charibond Fixed Interest Units 60,000 60,000
(2021: 1,704.224) M&G Charity Multi Assess Accumulation
Units 93,697 93,697
(2021: 136.401) M&G Charifund Accumulation Units 25,000 25,000
______ ______
Cost as at 31 December 2021 178,697 178,697
______ ______
9. CREDITORS: Amounts falling due
within one year
2021 2020
£ £
Other creditors 1,114 4,940
Weekly maintenance contribution income deferred - -
_____
1,114 4,940
_____

PEACE COTTAGES CHARITY PAGE 17

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED 31 DECEMBER 2021

10. RECONCILATION OF NET INCOME/(EXPENDITURE) TO NET CASH FLOW FROM OPERATING ACTIVITES

2021 2020
£ £
Net income/(expenditure) for the reporting
period (as per the statement of comprehensive 29,209 (34,567)
income)
Adjustments for:
(Gains)/losses on investments (18,279) 17,563
Investment income (7,966) (8,484)
(Increase)/decrease in debtors 68
141
Increase/(decrease) in creditors (3,826) 2,772
______ ______
Net cash flow from operating activities (794) (22,575)
______ ______
11. ANALYSIS OF CASH AND CASH EQUIVALENTS
2021 2020
£ £
Cash at bank and in hand 17,299 16,908
______ ______

12. TRANSFERS BETWEEN FUNDS

During the year, £12,448 was transferred from the General Fund to the Extraordinary Repairs Reserve.

13. RELATED PARTY TRANSACTIONS

There were no related party transactions in the year.