Miss Agnes H Hunter's Trust Report of the Trustees and Audited … · 2019-02-21 · Miss Agnes H Hunter’s Trust Report of the Trustees For the year ended 31 March 2016 4 In implementing

Miss Agnes H Hunter's Trust

Report of the Trustees and Audited Financial Statements

For the Year Ended 31 March 2016

Miss Agnes H Hunter's Trust is a registered Scottish Charity, No. SC004843

Miss Agnes H Hunter’s Trust

Report of the Trustees

For the year ended 31 March 2016

Report of the Trustees 1 - 8 Independent Auditor’s Report 9 - 10 Statement of Financial Activities 11 Balance Sheet 12 Statement of Cash F lows 13 Notes to the Financial Statements 14 - 24 The following pages do not form part of the statutory financial statements Detailed Statement of Financial Activities 25




1

The Trustees present their Report with the Financial Statements of the Charitable Trust for the year ended 31 March 2016. OBJECTIVES AND ACTIVITIES

The key purpose of the Trust is to generate funds, from its property and investment portfolios, for distribution to charitable causes. The main aims of the Trust, as established by Miss Hunter in the Trust Deed, are to assist charitable organisations which:

• help the blind in Scotland • help disabled people • are concerned with the training and education of disadvantaged people • research into the cause, cure or alleviation of cancer, arthritis or tuberculosis

However Miss Hunter gave the Trustees wide discretion to work within and beyond these stated aims. The Trustees continue to stay close to Miss Hunter's original aims but refine grant aid policies periodically to ensure that the Trust’s funds are channelled towards current needs relevant to today's society and that their grants should be effective and have impact. In 2015/16 the grant aid policies, which had been determined in a review in 2009, were applied in the first grants allocation in June 2015. Revised policies were applied to all applications received after June 2015 and extend to charitable organisations that work in Scotland in the following three areas: Arthritis and cancer care The Trust will assist a range of projects supporting people suffering from arthritis or cancer. Although there are no restrictions on the type of project that can be considered, the Trust does have an interest in schemes that assist with self-management and those that help people live with their condition. The Trust has, however, discontinued its assistance to hospices. Helping disabled people, including those affected b y physical disability, visual impairment or illness, and those with mental health problems or l earning disabilities Priorities to include:

• advice, support, welfare benefit schemes • information, awareness and self-management/education • employment and life skills training

Assisting with the education and training of disadv antaged people The Trust will consider projects concerned with the education and training of disadvantaged people aged 16 and over, who have left school. Priority will be given to schemes which provide basic skills or improve employment prospects, such as life skills, ICT, literacy and numeracy; and sports/arts/environment only where appropriate. The restrictions in the Trust’s activities imposed by its governing documents prohibit the making of payments to organisations that, at the time, are controlled directly or indirectly in any way by the British Government. In addition there are a number of areas and activities which the Trustees have decided that they are unable to support including individuals and projects outwith Scotland, except for medical research. The Trust does not undertake fundraising or provide services, nor does it operate any trading subsidiary.




2

ACHIEVEMENTS AND PERFORMANCE

The Trustees have introduced two grant programmes: The Main Grant Programme for applications for grants of £4,000 and above to be allocated twice yearly at Trustees’ meetings, and a limited Small Grants Programme of up to an aggregate of £30,000 per annum, continually assessed with no set closing dates, for grants under £4,000 with a preference for support to small and medium sized charities. Applications to both programmes have to come within the same stated policy guidelines. The Trustees' objective has been that grants should be effective and have impact on the recipient charities' users and clients. A total of 51 grants were approved amounting to £349,085 of which £38,800 was in new forward commitments. The Trustees believe that committing future grants within reasonable limits has helped selected charities to plan ahead with greater confidence at a time of severe financial uncertainty. The total number and amount of grants approved in the Trustees' priority funding areas were:

Number of grants Total amount

approved Arthritis and Cancer Care 4 £25,378 Physical Disability and Illness 14 £106,198 Mental Health and Learning Disability 17 £107,329 Education and Training/Youth Development 16 £110,180 The website was updated during the year to reflect the Trustees’ revised grant aid policies and grant programmes. The current policy guidelines provide more detailed information and guidance for potential applicant charities on the scope, and limitations, of available grant aid and the procedural requirements relating to applications. The website has greatly enhanced the information available to other charities on the Trust's areas of interest and procedures, encouraging more focused and relevant applications, which is especially important in a challenging economic climate. The numbers of applications have continued to increase. Heritable Properties The policy on assets comprising the heritable properties originally endowed by Miss Hunter had been to retain the portfolio as an investment producing a reliable income stream to fund grant commitments. There being no restriction on disposal the Trustees had resolved during the period of the previous Report to sell the property investment over a three to four year period due to rising costs of maintenance and management. The strategy was for a combination of individual sales, and a smaller portfolio sale of regulated and assured tenancies later in the programme. Possession was recovered on a number of individual properties as short assured tenancies expired. However after engagement with tenants’ representatives, local politicians and The City of Edinburgh Council, a moratorium on the service of no-fault notices to quit was agreed and later extended indefinitely. Exploration of the viability of setting up a tenants’ co-operative for a potential bulk purchase was commenced but later held over while discussions with housing associations took place. After an extended period of negotiation, contractual agreement was reached on 9 November 2016 for a bulk sale of the remainder of the portfolio, comprising 92 properties, to Places for People Scotland Limited, a subsidiary company of Castle Rock Edinvar Housing Association. The transaction was completed on 28 November 2016.




3

During the period from 1 April 2016 until the bulk portfolio sale, six vacant properties were sold individually. The carrying value of the heritable properties is shown as at 31 March 2016 at £8,850,000, based on the bulk sale value of the remaining 92 properties in the portfolio together with the individual sales value of the six vacant properties completed after 1 April 2016. This value properly reflects the tested open market value demonstrated by subsequent actual sales of all the properties owned by the Trust at 31 March 2016, but shows a reduction from the valuation as at 31 March 2015 which had been based on a previous desktop professional valuation undertaken in 2012, uplifted to reflect capital expenditure after that date. The Trustees had previously received expert advice that a bulk sale could only be achieved at a discounted figure and therefore took the view that they were justified in accepting a discounted value as the price for a bulk sale. It allows for earlier receipt of sale proceeds than would have been achieved by a process of individual sales which might have involved some enforced recovery of possession. The bulk sale to a subsidiary company of a housing association, with the resources to maintain and develop the ageing property portfolio, gives the reassurance of continued security for tenants and is believed to be in the best interest of all parties concerned. The sale proceeds will be added to the Trust’s portfolio of stock market investments. The performance of stock market investments is monitored and fully reported on by the investment managers at least twice a year and quarterly valuations are distributed to Trustees. Until November 2015, Standard Life Wealth acted as investment managers with a brief to achieve an income yield of 3.8% and long term capital growth, with a medium/high degree of risk. The investment portfolio (excluding heritable property) was previously invested in collective investment funds but with new cash being added this was switched, with effect from April 2015, to a segregated portfolio to improve diversification. Management of the investment portfolio transferred to Rathbone Investment Management from December 2015 with the same investment criteria, after a competitive tender process involving a number of leading investment managers.

FINANCIAL REVIEW

Principal Funding Sources The Trust derives its income from portfolios of let properties and investments in shares and securities. The funds generated in the form of rental income, dividends and interest receipts, less the costs of raising funds and undertaking its charitable activities, allows the Trust to make grants to appropriate charitable causes.

Although in the year to 31 March 2016 expenditure exceeded income by £20,182 (compared with a surplus of £55,178 of income over expenditure in the previous year), the Trust maintained its distribution programme and awarded grants totalling £349,085 (2015: £349,732). Note 7 details the recipients of the grants paid and payable. The Trustees anticipate that the net income from Trust funds will allow the grant distribution programme to be sustained at or near this level in the current financial period and potentially to be increased in future periods, albeit with a lower gross income but with the Trust running at much reduced cost, free of the costs of maintenance and management of property.

The net income deficit arose from a reduction of rental income to £534,372 (2015: £718,249) (Note 4), offset by a reduction in expenditure on raising funds to £161,179 (2015: £231,151) (Note 5) and an increase in income from listed investments to £107,441 (2015: £63,664) (Note 4).




4

In implementing the decision to disinvest from let property, the Trustees sold 23 flats during the year. As outlined above, all remaining let properties have also been sold since the year-end. In order to achieve that disinvestment by a combination of individual and bulk sales, continuing to own flats while vacant resulted in a reduction of rental income. However, property expenses were also reduced as a consequence. As the proceeds of property sales became available, the funds were added to the portfolio for investment in shares and securities, resulting in an increase in the dividend and interest income arising. The Trustees acknowledge that the transition from property ownership to listed investments will, for a short time, restrict funds available for distribution until the income stream from listed investments is fully established.

As well as showing income and expenditure in the year, the Statement of Financial Activities on Page 11 notes gains and losses on investments, both realised on transactions concluded during the year and arising from revaluation of the investments held at the year-end date. The amount to which investment property has been revalued reflects the actual proceeds achieved on sales made following the year-end. This substitutes actual market values achieved on sales for amounts that were previously estimated from desk-top valuations. The impact is to show total funds of the Trust at the year-end at an amount of £14,651,860 which the Trustees consider to be a much more accurate reflection than was able to be achieved previously.

Note 19 shows the movements in funds during the year. At the year-end the balance on the property reserve fund, which was established to smooth the impact of the cost of significant repairs and improvements to let properties, was £205,544 (2015: £957,537). Following the disposal of all remaining properties and there being no continuing need for a property reserve fund, the balance will be released during the current year.

Reserves Policy The Trustees’ policy on reserves and retentions at the year end is to provide fully for forward committed grant instalments, an estimated provision for payment of grants at the next scheduled distribution date and approximately six months’ budgeted expenditure for the following accounting period (seasonally adjusted). The accumulated income collected to 31 March annually provides the bulk of the planned distribution of grants allocated in June. The Trustees considered that £318,000 was an appropriate reserves provision at 31 March 2016 and there was no need for substantial contingency cash provision for unexpected costs as there were sufficient realisable assets to cover most situations. The total funds of the Trust at 31 March 2016 were £14,651,860 of which £323,903 comprised unrestricted and undesignated funds. Cash balances in the hands of Rathbones Investment Management represented the proceeds of previously sold heritable properties awaiting investment as part of the permanent endowment. Investment Policy The Trustees have wide powers of investment. The Trust Deed does not prescribe an ethical policy for investment but investment in companies directly concerned in tobacco products and alcoholic beverages is avoided.




5

Risk Management The Trustees consider the main areas of risk to which the Trust is exposed in each financial year. A risk register is maintained and the Trustees review the potential impact of relevant risks and establish systems to manage them. The Trustees are satisfied that the systems are in place to mitigate exposure to the major risks which have been identified and reviewed. The principal risks relate to the rented property portfolio, upkeep of older property, lettings compliance and listed investments management. These are mitigated by outsourcing to dedicated letting agents, insurance brokers and discretionary investment managers, respectively. Cash administration (until 31 March 2016), and secretarial and governance administration was delegated to Pagan Osborne Limited. The Trust is not exposed to risks involved in fundraising because its activities are supported entirely by income from its investment and property portfolios. It has no employees or associated employment liabilities. PLANS FOR FUTURE PERIODS

It is the Trustees' view that the current austere economic climate for charities, with many funding bodies, particularly those in the statutory sector both national and local, providing lower levels of funding than previously, results in continuing significant competition for funding from grant-making charities. The charities working within three of the Trustees' policy areas are particularly reliant on some form of statutory funding and will therefore be most adversely affected by its continuing contraction and the likely changing nature of the resulting agreements or contracts. In this climate the Trustees will continue to be diligent in 2016/17 in maintaining grant- giving to the maximum level possible, in a manner that is effective and provides impact. Although the Trustees do not intend to set specific grant aid levels for each of their policy areas for 2016/17, they will keep under review the allocation of funding between these areas and the level approved as forward commitments, recognising that it is the need for, and quality of, proposed projects that will have priority in assessment. In doing so the Trustees will continue to evaluate the revised grant aid policies and operation of the two Grant Programmes for relevance and effectiveness. Full details of the Trust's policies and application procedures are available on the Trust's website. The Trustees expect that the number of applications received will increase and, to manage this increased demand, the Trustees will continue to work within their strict policy guidelines. However, in common with other Trusts and Foundations, the Trustees will have to consider carefully issues such as sustainability. The Trustees will continue to give priority to small and medium sized charities. The Trustees will also continue to expect applicant charities to maintain good monitoring and evaluation systems to assess what difference they have made. An objective of the Trustees remains to move to a fully online grant application system and they plan a review of the current grant management software.




6

On the advice of the Trust’s accountants, in future the accounting reference date will be set at 30 June with the effect that the current period will be extended to fifteen months ending on 30 June 2017. The Trustees hope that, free of the professional, management and maintenance costs of property ownership, the Trust’s costs will be reduced. The Trustees are confident that, in the light of the rate of return presently being achieved on the current stock market investments and once the proceeds of sales of the heritable properties has been fully invested, the net income of the Trust will be sufficient to maintain or increase the level of grants which have been given in recent years. Two rounds of principal grants will be made in the accounting period to 30 June 2017. It is envisaged that a further two rounds will be made in the year 2017/18. The present Grants Assessor has intimated that she will retire in the accounting period 2016/17 and the Trustees intend to recruit a Trust Manager who will take on administrative duties in addition to grants assessment. The trustees also propose to seek the appointment of two new trustees with expertise in investment and with a knowledge and background in the voluntary sector, respectively STRUCTURE, GOVERNANCE AND MANAGEMENT

Miss Agnes H Hunter's Trust was formed as an unincorporated charity on 20 December 1954 (registered Scottish Charity, number SC004843). The Trust is governed by a Trust deed in terms of the Will of Miss Agnes H Hunter. There are no restrictions in the governing document on the operation of the Trust or in its investment powers, other than those imposed by general charity law and those referred to on page 1. Organisational Structure The Trust is managed by a Board comprising five Trustees meeting at least four times a year with additional meetings as required. There are currently no standing sub-committees. Decision making The Trust’s operations and financial management are administered on a day-to-day basis by its law agents, Pagan Osborne, with NDS Paterson co-ordinating instructions to and reports from outsourced agents, receipt of grant applications and overseeing distribution of awards. From 1 April 2016 the Trust’s financial administration transferred from Pagan Osborne to Scott-Moncrieff. NDS Paterson will continue to oversee communication with legal agents. The Grants Administrator makes a preliminary assessment of the grant applications, followed by a period of close engagement with applicants to obtain additional material as appropriate and advises the Board of Trustees, which then determines the grant awards. The Grants Administrator also monitors feedback and recipients’ reports on outcomes. Trustee induction and training Trustees have hitherto been appointed by invitation from existing Trustees, seeking to balance relevant professional skills and knowledge and experience of the voluntary sector. Trustees’ tenure on the Board is an initial term of 5 years, with a possible 3 year extension. The Board of Trustees met on eight occasions in the current year as a full board. It considers reports of the Grants Administrator, property management agents and investment advisers, determines distribution policy and allocates grants to beneficiaries.




7

New Trustees are provided with an induction pack including a copy of the Trust Deed and Statement of Grant Policies, the latest Report and Financial Statements, the most recent Board minutes and Grants Administrator's Report and Recommendations. Trustees will normally have an opportunity every year to attend a seminar on charity law, investment and other training and information sessions. Through membership of the Association of Charitable Foundations, the Trust provides access for Trustees to the ACF education and training programme. The Trust is also a member of Scottish Grantmakers. Relationships with Related Parties The Trust does not directly employ any staff. Part-time grants assessment/consultancy is provided by the Grants Administrator who is a related party, as defined, to one Trustee, NDS Paterson. REFERENCE AND ADMINISTRATIVE DETAIL Miss Agnes H Hunter's Trust is a registered Scottish Charity, number SC004843 Trustees and key management personnel

WNJ Thomson WS Chairman NDS Paterson WS AP Gray FCIBS Mrs AM Campbell JI Hume CA Principal address and solicitors

Clarendon House 116 George Street Edinburgh EH2 4LH www.agneshunter.org.uk Auditor

Scott Moncrieff Exchange Place 3 Semple Street Edinburgh EH3 8BL Bankers

HSBC Plc 76 Hanover Street Edinburgh EH2 1EL Investment managers

Rathbone Investment Management 28 St Andrew Square Edinburgh EH2 1AF




8

STATEMENT OF TRUSTEES RESPONSIBILITIES The Trustees are responsible for preparing the Report of the Trustees 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 Scotland, the Charities and Trustee Investment (Scotland) Act 2005, Charities Accounts (Scotland) Regulations 2006 (as amended) and the provisions of the charity's constitution 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 Trust and of the incoming resources and application of resources, including the income and expenditure, of the Trust for that period. In preparing those financial statements, the Trustees are required to: - select suitable accounting policies and then apply them consistently; - observe the methods and principles in the Charity Statement Of Recommended Practice; - make judgements and estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that

the Trust will continue in business. The Trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Trust and to enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the provisions of the Trust's constitution. They are also responsible for safeguarding the assets of the Trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Trustees are responsible for the maintenance and integrity of the Trust and financial information included on the Trust's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Disclosure of information to the auditor

As far as the Trustees are aware at the time the report was approved:

- There is no relevant information of which the Trust’s auditor is unaware, and

- The Trustees have taken all the steps that they ought to have taken as trustees in order to make themselves aware of any relevant audit information, and to establish that the Trust’s auditor is aware of the information.

Approved by order of the Board of Trustees on 15 December 2016 and signed on its behalf by: WNJ Thomson - Chairman


Independent Auditor’s Report to the Trustees


9

We have audited the financial statements of Miss Agnes H Hunter's Trust for the year ended 31 March 2016 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. This report is made solely to the trust's trustees, as a body, in accordance with Section 44(1) (c) of the Charities and Trustee Investment (Scotland) Act 2005 and regulation 10 of the Charities Accounts (Scotland) Regulations 2006 (as amended). Our audit work has been undertaken so that we might state to the trust’s trustees those matters we are required to state 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 to anyone other than the trust and the trust's trustees as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of trustees and auditor

As explained more fully in the Statement of Trustees Responsibilities set out on page 8, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. We have been appointed as auditors under Section 44(1) (c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under that Act. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB’s) Ethical Standards for Auditors. Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s web-site at www.frc.org.uk/auditscopeukprivate. Opinion on financial statements

In our opinion the financial statements: • give a true and fair view of the state of the trust's affairs as at 31 March 2016 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 applicable to Smaller Entities; and

• have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).


Independent Auditor’s Report to the Trustees


10

Matters on which we are required to report by excep tion

We have nothing to report in respect of the following matters where the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion: • the information given in the Report of the Trustees is inconsistent in any material respect with the

financial statements ; or

• proper 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 require for our audit. Scott-Moncrieff Statutory Auditor Eligible to act as an auditor in terms of Section12 12 of the Companies Act 2006 Exchange Place 3 Semple Street Edinburgh EH3 8BL 15 December 2016


Statement of Financial Activities (incorporating in come and expenditure)


11

Notes

Year ended 31/03/16

Year ended 31/03/15

£ £ Income and endowments from: Investments 4 642,696 782,607 ──────── ──────── Total 642,696 782,607 ──────── ──────── Expenditure on : Raising funds 5 161,179 231,151 Charitable activities 6 501,699 496,278 ──────── ──────── Total 662,878 727,429 ──────── ──────── Net (expenditure)/income before (losses)/gains on investments

(20,182)

55,178

Net (losses)/gains on investments (196,754) 314,322 Net (losses) on investment properties 13 (1,887,000) - ──────── ──────── Total (losses)/gains on investments (2,083,754) 314,322 ──────── ──────── Net (expenditure) /income and net movement in funds

(2,103,936)

369,500

Reconciliation of funds: Total funds brought forward 16,755,796 16,386,296 ──────── ──────── Total funds carried forward 19 14,651,860 16,755,796 ════════ ════════

The notes on pages 14 to 24 form part of these financial statements.


Balance Sheet

As at 31 March 2016

12

Notes

Year ended 31/03/16

Year ended 31/03/15

£ £ Fixed assets: Investments

Investments 12 5,272,413 1,954,174 Investment property 13 8,850,000 13,500,000 ──────── ────────

Total fixed assets 14,122,413 15,454,174 ──────── ──────── Current assets:

Debtors 14 25,516 23,366 Cash at bank and in hand 16 606,106 1,390,424 ──────── ────────

Total current assets 631,622 1,413,790

Liabilities: Creditors: amounts falling due within one year 17 (95,775) (104,168) ──────── ──────── Net current assets 535,847 1,309,622 ──────── ──────── Total assets less current liabilities 14,658,260 16,763,796 Creditors; amounts falling due after more than one year 18 (6,400) (8,000) ──────── ──────── Total net assets 14,651,860 16,755,796 ════════ ════════ The funds of the charity: Unrestricted funds 19 14,651,860 16,755,796 ──────── ──────── Total charity funds 14,651,860 16,755,796 ════════ ════════

The financial statements were approved by the Board of Trustees on 15 December 2016 and were signed on its behalf by: WNJ Thomson Trustee



Statement of Cash Flows

For year ended 31 March 2016

13

Year ended 31/03/16

Year ended 31/03/15

Note £ £ Cash flows from operating activities:

Net cash used in operating activities: 21 (675,021) (771,610)

──────── ────────

Cash flows from investing activities: Dividends, interest and rents from fixed asset investments

642,696 782,607

Proceeds from sale of investment properties 2,725,439 1,119,011

Purchase of fixed asset investments (5,106,991) (161,774)

Proceeds from sale of fixed asset investments 2,660,278 -

──────── ────────

Net cash provided by investing activities 921,422 1,739,844

──────── ────────

Change in cash and cash equivalents in the reporting period

246,401 968,234

Cash and cash equivalents at the beginning of the reporting period

16 1,392,121 423,887

──────── ──────── Cash and cash equivalents at the end of the reporting period

16 1,638,522 1,392,121

════════ ════════



Notes to the Financial Statements


14

1. Statement of compliance The financial statements are the Trust’s first financial statements prepared in accordance with Financial Reporting Standard 102, ‘The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice) issued by the Financial Reporting Council. The Trust’s date of transition to FRS 102 is 1 April 2014. Before 2015 the financial statements were prepared in accordance with UK GAAP applicable prior to the adoption of FRS 102, as issued by the Financial Reporting Council and the Statement of Recommended Practice (SORP) “Accounting and Reporting by Charities” and referred to below as previous UK GAAP. Information on the impact of first time adoption of FRS 102 is given in note 22 to these financial statements.

2. Accounting policies

Accounting convention

The financial statements have been prepared under the historical cost convention, with the exception of the revaluation of investment properties and the statement of fixed asset investments at market value. The financial statements have been prepared in accordance with the Statement of Recommended Practice: “Accounting and Reporting by Charities Financial Reporting Standard 102, as issued by the Financial Reporting Council (effective 1 January 2015) and preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. Miss Agnes H Hunter’s Trust meets the definition of a public benefit entity under FRS 102. The financial statements are presented in pounds sterling as that is the currency in which the Trust’s transactions are denominated. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires trustees to exercise judgement in applying the trust’s accounting policies. The areas involving a higher degree of judgement, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3. The following principal accounting policies have been applied: Going Concern

Due to the strength of the Trust’s balance sheet and the current strong cash position of the Trust, the Trustees are of the opinion that the Trust can continue to meet its obligations as they fall due for the foreseeable future and accordingly, have prepared the financial statements on a going concern basis. Recognition and allocation of income

Incoming resources are recognised once the Trust has entitlement to the resources, it is probable that the resources will be received, and the monetary value of the resources can be measured with sufficient reliability. Due to uncertainty of receipt, no account is taken of rent arrears collectible by the property agents. At the year-end these arrears amount to £42,944 (2015: £15,410). Dividend income is recognised when the right to receipt is established and is measured at amortised cost.




15

2. Accounting policies (continued) Resources and allocation of expenditure

Expenditure is recognised when the Trust has a legal or constructive obligation committing the Trust to that expenditure. All expenditure has been accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category.

Grants payable in furtherance of the Charity's obje ctives

The Trust receives grant applications from a number of Charities and every application is considered by the Grants Administrator who recommends acceptance or otherwise to the Board of Trustees. The Board may accept or reject the recommendations. A contingent liability is disclosed for those grants which do not represent liabilities, where the potential obligation will only be confirmed by future events outside the Trustees' control. Grants offered subject to conditions which have not been met at the year-end date are noted as a commitment and accrued as expenditure. Cost of raising funds

These are the costs of property management, insurance and maintenance and investment management fees. Support costs

Support costs of activities for charitable purposes comprise the fees of the legal agents in the day-to-day running of the Trust and the fees of the Grant Administrator for grant application research and have been allocated in full to charitable activity costs. Governance costs

These comprise all costs involved in the public accountability of the charity. These are the Auditors, and the Sheriff Court Auditor's fees, together with an appropriate proportion of legal agent's fees based on how much Pagan Osborne have spent towards the governance and support of the charities activities. The split provided is a calculated estimate. Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. Tangible fixed assets are capitalised where the cost is greater than £1,000. Computer equipment - 33% on cost Taxation

The Trust is exempt from tax on its charitable activities. Fixed asset investments

The investment property portfolio has been included in the balance sheet at a bulk sale market value. Listed investments have been included in the balance sheet at their mid-market value at the balance sheet date. Gains and losses arising are charged or credited to the Statement of Financial Activities in the period in which they arise. Unrealised gains and losses are computed by reference to the market value of the investments at the balance sheet date, compared to the opening valuation (or purchase price, if later), and gains and losses arising on similar categories of investments are netted off.




16

2. Accounting policies (continued) Financial assets and liabilities

Financial instruments are recognised in the Statement of Financial Activities when the Trust becomes a party to the contractual provisions of the instrument. Financial instruments are initially measured at transaction price. Financial instruments are classified as ‘basic’ or ‘other’ in accordance with Chapter 11 of FRS 102. At the end of each reporting period, basic financial instruments are measured at amortised cost using the effective rate method. All financial instruments not classified as basic are measured at fair value at the end of the reporting period with the resulting changes recognised in income or expenditure. Where the fair value cannot be reliably measured, they are recognised at cost less impairment. Financial assets are derecognised when the contractual rights to the cash flows from the asset expire, or when the charity has transferred substantially all the risks and rewards of ownership. Financial liabilities are derecognised only once the liability has been extinguished through discharge, cancellation or expiry. Fund structure

Unrestricted income funds comprise those funds which the Trustees are free to use for any purpose in furtherance of the charitable objects. These include designated funds where the Trustees, at their discretion, have created a fund for a specific purpose. The Trustees have agreed that the value of the fixed asset investment properties and listed investments should be designated for the generation of income. Cash and cash equivalents

Cash and cash equivalents consist of balances with banks. Cash and cash equivalents are measured at fair value, based on the relevant exchange rates at the reporting date. Creditors

Short term creditors are measured at the transaction price

3. Judgements in applying accounting policies and k ey sources of estimation uncertainty In preparing the financial statements trustees make estimates and assumptions which affect reported results, financial position and disclosure of contingencies. Use of available information and application of judgement are inherent in the formation of the estimates, together with past experience and expectations of future events that are believed to be reasonable under the circumstances. Actual results in the future could differ from such estimates. At the year end, there were no areas where there were estimates and assumptions with a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.




17

4. Investment income 2016 2015 £ £ Rents received 534,372 718,249 Income from listed fixed asset investments 107,441 63,664 Deposit account interest 883 694 ──────── ──────── 642,696 782,607 ════════ ════════

5. Raising funds expenditure

Direct costs 2016 2015 £ £ £ Property expenses 63,264 63,264 123,731 Insurance 19,501 19,501 21,572 Property factor's fees 64,845 64,845 85,848 Investment managers fees 13,569 13,569 - ──────── ──────── ──────── 161,179 161,179 231,151 ════════ ════════ ════════

6. Charitable activities costs

Direct Costs

Funding of Grants

Governance & Support

Costs 2016 Total £ £ £ £ Grants administration 31,111 - - 31,111 Grants to Charitable institutions (note 7)

-

349,085

-

349,085

Support costs (note 8) - - 79,558 79,558 Governance costs (note 9) - - 41,945 41,945 ──────── ──────── ──────── ──────── 31,111 349,085 121,503 501,699 ════════ ════════ ════════ ════════

Direct Costs

Funding of Grants

Governance & Support

Costs 2015 Total £ £ £ £ Grants administration 33,578 - - 33,578 Grants to Charitable institutions (note 7)

-

349,732

-

349,732

Support costs (note 8) - - 71,977 71,977 Governance costs (note 9) - - 40,991 40,991 ──────── ──────── ──────── ──────── 33,578 349,732 112,968 496,278 ════════ ════════ ════════ ════════




18

7. Grants Payable The total grants payable to institutions during the year was as follows: 2016

£ 2016

£ 2015

£ 2015

£ Blind and Visually Impaired Calibre - 4,800 Hazelwood VISION - 6,000 Living Paintings - 4,000 ──────── ──────── - 14,800 Arthritis & Cancer – Research Arthritis Research UK - 10,000 Cancer Research UK - 10,000 Sparks - 10,000 ──────── ──────── - 30,000 Arthritis & Cancer – Care Arthritis Care - 23,094 Children with Cancer and Leukaemia Support for Parents 6,500 - Listening Books 3,000 - Maggie’s Cancer Caring Centres 8,000 5,000 Pain Concern 7,878 - Prostate Cancer UK - 8,400 Roy Castle Lung Cancer Foundation - 8,810 Teenage Cancer Trust - 9,000 ──────── ──────── 25,378 53,304 Physical Disability and Illness Action on Hearing Loss Scotland - 4,000 Bobath - 5,482 Borders Talking Newspaper 3,000 - Capability Scotland - 5,000 Contact a Family - 3,000 Deaf Action 7,000 - Deafax - 4,218 Dyslexia Action 10,000 - Dystonia Society - 3,000 Edinburgh Headway Group 4,130 5,000 Epilepsy Scotland - 12,000 Headway Highland 5,000 - Islay & Jura Community Enterprises Ltd 12,000 6,000 Revive MS Support 3,500 - RNIB 19,200 - Royal Blind 5,589 - Scottish Huntington’s Association 7,000 5,000 Scottish Spina Bifida Association 6,000 - UcanDoIT 3,000 - Visibility 8,000 - Waverley Care 12,779 - ──────── ──────── 106,198 52,700




19

7. Grants Payable (continued)

2016 £

2016 £

2015 £

2015 £

Mental Health and Learning Disability Alcohol Focus Scotland 5,500 - Befrienders Highland 7,000 - Cairns Counselling 5,000 - Citizens Theatre 10,000 5,000 Down’s Syndrome Scotland - 15,000 Drake Music Scotland 5,700 - FAIR 10,000 - FDAMH - 2,880 Input Community Works 4,000 - Interest Link Borders 5,000 5,000 Kintyre Environment Group 2,500 - Lothian Autistic Society 6,126 - Mindspace - 8,000 Options in Life 3,000 - Parent to Parent 8,453 - Penumbra 5,000 - Place2Be 10,000 8,535 Rock Trust - 8,000 SAMH - 8,000 Scottish Autism - 4,500 Signpost 7,000 - South Ayrshire Befriending Project - 7,000 Tagsa Uibhist 6,050 - The Junction - 6,864 The Yard - 6,700 Unity Enterprise 7,000 - ──────── ──────── 107,329 85,479 Education and Training Youth Development

Bethany Christian Trust 11,868 10,000 Buzz Project - 5,000 Children 1st - 6,307 Comas 4,000 - Crisis - 6,883 Drum Riding for the Disabled Edinburgh 3,266 - Falkland Stewardship Trust - 4,500 FreshStart - 8,000 Galgael Trust 12,000 - Geeza Break 7,827 - Getting Better Together Ltd 6,780 - Glasgow Women’s Library 5,050 5,050 Grassmarket Community Project 10,000 - Helenslea Hall Management Committee - 6,300 John Muir Trust 8,000 - Move On - 16,000 Netherthird Community Action Training 8,000 - No Way Trust Ltd - 5,000 Prince’s Trust – Scotland - 7,729 Scottish Business in the Community 7,000 - Skill Force Scotland - 3,800




20

7. Grants Payable (continued)

2016 £

2016 £

2015 £

2015 £

Education and Training Youth Development (continued)

St Andrew’s & St George’s West Church 37 - Stepping Stones North Edinburgh 8,000 - Tomorrow’s People - 5,000 Up-2-Us 8,532 - Venture Trust - 19,930 Wester Hailes Youth Agency - 4,000 Whiteinch Centre Limited 6,800 - Young Enterprise Scotland - 4,000 Youth Vision 3,020 - ──────── ──────── 110,180 112,449 ──────── ──────── 349,085 349,732 ════════ ════════ Total of grants committed in current and prior years for future payment

For 2017/2018 6,400 - For 2016/2017 40,400 8,000 For 2015/2016 - 50,512 ──────── ──────── 46,800 58,512 ════════ ════════

8. Support costs

Grants administration 2016 2015

£ £ £ Legal agent’s fees 62,894 62,894 64,296 Sundries and exceptional costs 16,664 16,664 7,681 ──────── ──────── ──────── 79,558 79,558 71,997 ════════ ════════ ════════

9. Governance costs

Grants administration 2016 2015

£ £ £ Legal agent’s fees 26,955 26,955 28,631 Sheriff court auditor 4,190 4,190 4,230 Auditors’ remuneration 10,800 10,800 8,130 ──────── ──────── ──────── 41,945 41,945 40,991 ════════ ════════ ════════

Auditor’s remuneration includes £6,900 (2015: £6,000) for the statutory audit and £1,800 (2015: £nil) for preparation of the statutory accounts.




21

10. Trustees’ expenses and remuneration

2016 2015 £ £ Trustees’ expenses 275 194 ════════ ════════ Expenses were reimbursed to two trustees for travel and subsistence throughout the year (2015: two trustees). The trustees, who are considered to be the key management personnel of the Trust, all give freely of their time and expertise without any form of remuneration or other benefit in cash or kind (2015: £nil).

11. Tangible fixed assets Computer

equipment £ Cost At 1 April 2015 and 31 March 2016 10,958 ──────── Depreciation At 1 April 2015 and 31 March 2016 10,958 ──────── Net book value At 31 March 2016 - ════════ At 31 March 2015 - ════════

12. Fixed asset investments

Listed investments

Listed investments

2016 2015 £ £ Listed investments at market value At 1 April 2015 1,952,477 1,598,480 Additions 5,106,991 161,774 Disposals (2,780,123) - Revaluation (loss)/gain (39,348) 192,223 ──────── ──────── At 31 March 2016 4,239,997 1,952,477 ──────── ──────── Cash At 31 March 2016 1,032,416 1,697 ──────── ──────── Total listed investments 5,272,413 1,954,174 ──────── ──────── Historical cost 4,274,585 1,343,865 ──────── ────────




22

13. Investment property

£ Market value At 1 April 2015 13,500,000 Additions - Disposals (2,763,000) Revaluation (1,887,000) ──────── At 31 March 2016 8,850,000 ──────── Net book value At 31 March 2016 8,850,000 ════════ At 31 March 2015 13,500,000 ════════

14. Debtors

2016 2015 £ £ Prepayments 5,058 5,397 Accrued income 20,458 17,969 ──────── ──────── 25,516 23,366 ════════ ════════

15. Financial assets and liabilities

2016 2015 £ £ Financial assets at fair value 14,122,413 15,454,174 Financial assets at amortised cost 626,564 1,408,393 Financial liabilities at amortised cost (102,175) (112,168) ──────── ──────── 14,646,802 16,750,399 ════════ ════════

Financial assets at fair value comprise of fixed asset investments and investment properties. Financial assets at amortised cost comprise of accrued income plus cash at bank. Financial liabilities at amortised cost comprise of all creditors.

16. Cash and cash equivalents

2016 2015 £ £ Cash at bank and in hand 606,106 1,390,424 Cash as part of investment portfolio 1,032,416 1,697 ──────── ──────── 1,638,522 1,392,121 ════════ ════════




23

17. Creditors: Amounts falling due within one year

2016 2015 £ £ Accrued expenses 55,375 53,656 Grants payable 40,400 50,512 ──────── ──────── 95,775 104,168 ════════ ════════

18. Creditors: Amounts falling due after one year

2016 2015 £ £ Grants payable 6,400 8,000 ════════ ════════

19. Movement in funds

Unrestricted funds

Designated property

reserve fund

Designated investment

fund Total funds £ £ £ £

As at 1 April 2015 344,085 957,537 15,454,174 16,755,796 Investment income 642,696 - - 642,696 Costs of raising funds (161,179) - - (161,179) Grants to charitable institutions (349,085) - - (349,085) Grants administration (31,111) - - (31,111) Support costs (79,558) - - (79,558) Governance costs (41,945) - - (41,945) ──────── ──────── ──────── ──────── Total resources expended (662,878) - - (662,878) Net incoming/(outgoing) resources before transfers

(20,182) - - (20,182)

Transfers - (751,993) 751,993 - ──────── ──────── ──────── ──────── Net incoming/(outgoing) resources (20,182) (751,993) 751,993 (20,182) ──────── ──────── ──────── ──────── Losses on revaluation of investment properties

-

-

(1,887,000)

(1,887,000)

Realised loss on investment property - - (37,562) (37,562) Unrealised loss on fixed asset investments

-

-

(39,348)

(39,348)

Realised loss on fixed asset investments

-

-

(119,844)

(119,844)

──────── ──────── ──────── ──────── Other recognised gains/(losses) - - (2,083,754) (2,083,754) ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── As at 31 March 2016 323,903 205,544 14,122,413 14,651,860 ════════ ════════ ════════ ════════




24

19. Movement in funds (continued)

The transfer from the property reserve fund to the investment fund relates to money from the sale of properties in the prior year being invested in the investment portfolio in the year. Designated investment fund – The Trustees have agreed that the value of the fixed asset investment properties and listed investments should be designated for the generation of income. Designated property reserve fund – The Trustees agreed to set up this designated fund to cover major repairs to the investment properties.

20. Related Party Transactions Fees payable to the Grants Administrator are shown in note 6. The balance due to the Trust’s Grants Administrator was £15,758 (2015: £17,373) and is included in accrued expenses. The Grants Administrator is Jane Paterson who is the spouse of trustee NDS Paterson.

21. Notes to the Statement of Cash flows 2016 2015 £ £

Net (expenditure)/income for the reporting period (216,936) 369,500 Adjustments for: Losses/(gains) on investments 159,192 (192,223) Loss/(profit) on sale of fixed assets 37,562 (129,011) Dividends and rents from investments (642,696) (782,607) (Increase)/decrease in debtors (2,150) 18,448 Decrease in creditors (9,993) (55,717) ──────── ──────── Net cash used in operating activities (675,021) (771,610) ════════ ════════

22. FRS 102 transition

These financial statements for the year ended 31 March 2016 are the Trust’s first financial statements that comply with FRS 102. The Trust’s date of transition to FRS 102 is 1 April 2014. The Trust’s last financial statements prepared in accordance with the previous UK GAAP were for the year ended 31 March 2015. There were no restatements required to the comparative prior year amounts as a result of the transition. The transition to FRS 102 has not affected the financial position or financial performance of the Trust.

23. Post Balance Sheet events

A total of 98 properties, comprising the entire year-end investment property portfolio, were sold post year-end. 6 properties were sold individually in May and June for a total of £807,843, with the remaining 92 properties being sold in a bulk sale in November for a total of £8,050,000. Investment properties at 31 March 2016 were revalued to reflect the post year-end selling prices.


Detailed Statement of Financial Activities


25

The following does not form par t of the financial statements 2016 2015 £ £ Income and endowments from: Investment Income

Rents received 534,372 718,249 Income from listed fixed asset investments 107,441 63,664 Deposit account interest 883 694 ──────── ────────

Total 642,696 782,607 Expenditure on: Raising Funds

Property expenses 63,264 123,731 Insurance 19,501 21,572 Property factor’s fees 64,845 85,848 Investment managers fees 13,569 - ──────── ────────

161,179 231,151 Charitable Activities

Administrator’s fees 30,452 31,570 Administrator’s outlays 659 2,008 Grants to institutions 349,085 349,732 ──────── ────────

380,196 383,310 Governance Costs

Legal agent’s fees 26,955 28,631 Sheriff court auditor 4,190 4,230 Auditors’ remuneration 10,800 8,130 ──────── ────────

41,945 40,991 Support Costs

Trustees’ expenses 275 194 Sundries and exceptional costs 16,389 7,487 Legal agent’s fees 62,894 64,296 ──────── ────────

79,558 71,977 ──────── ──────── Total 662,878 727,429 ──────── ──────── Net (expenditure)/ income before gains and losses (20,182) 55,178 Net (losses)/gains on investments Realised losses on fixed asset investments (119,844) - Realised (losses)/gains on investment property (37,562) 129,011 Unrealised (losses)/gains on fixed asset investments (39,348) 185,311 Losses on revaluation of investment properties (1,887,000) - ──────── ──────── Net movement in funds (2,103,936) 369,500 ════════ ════════

Documents

Miss Agnes H Hunter's Trust Report of the Trustees and Audited … · 2019-02-21 · Miss Agnes H Hunter’s Trust Report of the Trustees For the year ended 31 March 2016 4 In implementing