The Trustees present their report and financial statements for the year ended 31 December 2023 for the Trust which is a non-profit distributing company no. 2704407, formed in April 1992, and a registered charity no. 1010721, which replaced the Herefordshire and Gloucestershire Canal Society launched in 1983.
Governing document
The charity is a company, limited by guarantee as defined in the Companies Act 2006, and as such is governed by its Memorandum and Articles of Association.
Organisational structure
A team of volunteers runs the charity. It is managed by the Trustees who meet regularly, supported by site-based groups of volunteers and committees responsible for promotion and other commercial activities. The board appoint trustees to run The Wharf House Co. Ltd. The Articles of Association allow for up to twelve trustees to be in place but does allow for the co-option of two more to cover special projects. One third of the trustees stand down annually by rotation but can apply for re-election. Potential new trustees can be elected at the AGM or are co-opted during the year, but they must stand for formal election at the next AGM. When new Trustees join, they are provided with the information they need to fulfil their roles, which includes information about trustees and charity law.
Risk management
The trustees have a duty to identify and review the risks to which the charity is exposed and to ensure appropriate controls are put in place to reduce risks of fraud error or unsafe acts.
The Board of Trustees are aware of the general guidance issued by the Charity Commission on public benefit. The Trustees have regard to this guidance and consider the activities of the charity are conducted demonstrably for the public benefit and this applies also to their plans for future action. The charitable objects are the rebuilding a sustainable canal between Hereford and Gloucester.
The Trustees, who are also the directors for the purpose of company law, and who served during the year were:
Richard Appleton
Ralph Barber
Deborah Barber
Dave Goff
Bob Hargreaves
Edward Helps
Tony Higgins
Phillip Marshall
Eamonn McGurk
Robert Moreland
Keith Vaughan Welch
Objectives and activities:
The trust espouses the following core values: -
Restoring, enhancing, and protecting the canal for all
Integrating the canal corridor as a sustainable resource into the life of the communities along its route Endeavouring to complete the work in partnership with all other interested parties.
Interested Parties
This reporting period we have engaged further with the Neighbourhood Plans under development in Newent. Also, further engagement with councillors in local, district and county wide government including an open evening for local councillors at Malswick.
Voluntary help and gifts in kind
The volunteers form a critical part of the trust, not just in restoring the canal but also maintaining the restored sections and promoting widely through local and national events. All these aspects have continued throughout the year in question and are set to expand. The monetary value of the volunteer work that we have recorded adds up £188,150 but we know this does not reflect all the time dedicated to the business of H&G CT by all our hardworking volunteers.
Risks to the Charity
The Trust continues to negotiate new sites and to rejuvenate former sites with developers and landowners at various places along the line of the canal - including locations in Hereford, Gloucestershire and Ledbury. These can take years to conclude but we continue with an on-going diverse portfolio of negotiations so that a flow of announcements can realistically come over the coming years.
Reserves Policy
The charity aims to hold funds that are to cover the normal operating costs for 12 months.
Charitable activities and achievements
Chairman's Report:
My thanks go to all Trustees and Volunteers for their ongoing support and involvement in the Trust.
We are back to a normal operating environment after the past few years of Covid impacts, with working parties at restoration sites, promotional events attended, and social evenings continuing throughout the year. The AGM in June was face to face in at the Royal Oak, Much Marcle, with many attending.
We also celebrated the opening of new canal at Malswick. A Members’ Open Day was held there in September. It was very good that so many people came to see the work that has occurred and take a walk along the new canal, then enjoy a chat while having a cup of tea with cake and review the plans going forward for the site.
This report now covers both the complete calendar and Herefordshire and Gloucestershire Canal Trust Financial year.
Work continues in many areas. A planning application has created an opportunity to look at the terminus of the canal at Hereford, the planning for which is now going ahead, and some funds have been assigned to the H&G Canal Trust. Work continues with the planners as to how we can develop the basin in Hereford. The housing development at Holmer has hit some financial issues due to the developer going into receivership. In November we heard that the site owner has appointed another developer, and we will be following up with them to ensure the line of the canal as agreed in the initial planning application is still to be transferred to us. We continue to develop plans around Aylestone Park. Discussions are ongoing with the council linking with their city plans for the development of a Green Corridor along the canal line out to Aylestone Park and ensuring the route continues to be protected in the Herefordshire Local Plan that is currently under review.
Kymin: Ongoing site maintenance continued.
Yarkhill: Regular maintenance and vegetation clearance continued to keep the volunteers busy on this stretch of canal.
Adjoining Yarkhill: The team have gained access to the site next to Yarkhill and have done an excellent job of clearing the site. Unfortunately, we are finding that a number of landowners are happy to let us work sites but are not allowing the general public on to the site.
Ashperton: Some further work occurred but until we can get permission from the next landowners to reduce the level of the water we cannot do much further work on the site.
Ledbury: As mentioned in the last annual report the planning decision for the development of 625 houses and a number of factory units was given the go ahead to the north of the viaduct. Support for the H&G Canal Trust in land and money was also awarded. Unfortunately, discussions are still under way with the developer and Herefordshire Council to agree a way forward.
Dymock: The pump failed, was replaced and all well for a while, unfortunately it failed again. A further pump via a donation was supplied and this has worked well over the summer months. It will continue to be monitored.
Oxenhall: It was very pleasing to be involved in the replacement of the Stop Lock at the top of House Lock. The teamwork was excellent using skills across several sites. A small group of volunteers with help from Malswick volunteers are keeping the public footpath and the permissive way clear for the local walkers.
Newent: Whilst not a lot has happened on site, we now have a model of the proposed inclined plane that proved to be a good discussion point at a number of the shows the promotions team managed to get to throughout the year.
Malswick: With the planning permission finally received in November 2021, the team, with support from the Inland Waterways Association Waterways Recovery Groups, often known as WRGs, in 2022, enabled us to dig the canal and the first brand new piece of canal was filled with water in July 2023. With the next section of land purchased at the start of the year the team is preparing to submit a planning application for this section and is looking at the longer-term plans for getting under the Newent to Gloucester road.
Moat Farm: Routine maintenance, including mowing of the grassy areas, continued to be the focus of work here. The 'wilder' areas occasionally needed intervention to enhance the habitats that have been created.
Over: The land slippage at Vineyard Hill - the area is pegged out and continues to be monitored. There is a plan to improve the ability to get boats along the section of canal at the bottom of the hill. The team is working with the other users on site. A number of the containers were moved around to enhance the look of the area as well as improving the storage of equipment for the H&G Canal Trust and Sailing4Disabled.
Heritage Boats: The boats continue to be worked on.
Apart from the existing users of the basin, the model boaters and Sailing4Disabled, we have had new users. We have had further visits by the fire brigade to practice their boating skills, and they also visited Aylestone Park to test out their pumps, the Brownies visited Malswick to do some planting.
Mill Barn: As reported in editions of the Wharfinger throughout the year we are continuing to work this forward. We have a design; the original planned location has had to change due to underground pipes. We are getting the paperwork aligned ready to apply for planning permission when time is suitable.
Llanthony: Both properties are let, and the lock basin has had a couple of visits for volunteers to keep the Wysis Way footpath open which runs through the lock. We have also reached out to the Community Payback Team who have continued this work.
One of the keys to a solid restoration is the involvement of others - councils, locals, all types of groups. Work has occurred to continue to ensure the canal route is protected and supported by all. Positive comments have been received about the change in direction the trust is now taking, after a few years of some negative comments. The sharing of ideas and use of social media with Facebook and the many videos that have been published on YouTube as well as extra local signage have helped with the messaging.
Membership: Although we sadly lose members each year, the overall figure has this year increased to 1125. With the ability to get out to shows to promote the Trust we have had a steady increase in new members. We thank members for their generosity with all their donations.
Volunteers: A steady increase and interest in getting involved in the restoration work. We always need more including volunteers who would be able to take on extra responsibility around the sites or get involved in the promotion of the H&G Trust at sales events or presenting at talks.
The Wharfinger: Its high standard has been maintained thanks to many volunteer hours given by writers, photographers, editors, proof-readers, layout and delivery.
Walks Leaflets: these have been selling well. A new walk at Ledbury was created.
Website: This is constantly running behind the scenes. Queries are passed to the relevant H&G Trust member for a response.
Sales & Promotion: A very full calendar of promotion events, starting in Hereford with the Water Works Museum. Ledbury Community Day, Volunteer days at Malswick, Newent and Hereford, Braunston, Tibberton. Retro on the Water at Gloucester. The Winter Fayre at Newent was a very successful promotion and fundraising event seeing so many volunteers being involved and an increase in money to the H&G Trust even better than the 2022 splendid event.
Socials: A full calendar was undertaken, talks on many subjects, canal related, Rail related and another subject that Herefordshire is famous for, apples.
Grand Holiday Draw raised £2,000 Our gratitude goes to those who donate all the prizes.
We can report another good year financially. The income for the Trust and its subsidiary (The Wharf House Co Ltd) (excluding Restricted income) was £180k (2022 £162k) and rental income was £110k (2022 £104k). Costs were kept under control, with £82k spent including £62k on sites (2022 £70k). In consequence the companies recorded a useful surplus together totalling about £75k (2022 £30K). It was especially pleasing to receive a large, £35k, legacy which was much appreciated.
The Wharf House Co Ltd continued to trade profitably enabling it to pass over £60k to the Trust during the year to further the restoration projects. The Balance Sheets of both companies continued to strengthen and bank debt in the Trust continues to be repaid, with the long term bank loan being repaid by £15k during the year and now stands at £117k.
This year for the first time recently it was decided not to charge interest on the borrowings by The Wharf House Co Ltd from the Trust on the basis that it’s a paper transaction and fairly meaningless. As a result the inter-company account should be reduced quicker over time.
The Trustees' report was approved by the Board of Trustees.
I report on the financial statements of the H&G CT for the year ended 31 December 2023, which are set out on pages 6 to 21.
The H&G CT’s Trustees, who are also the directors of The Herefordshire and Gloucestershire Canal Trust Limited for the purposes of company law, are responsible for the preparation of the financial statements. The Trustees consider that an audit is not required for this year under section 144(2) of the Charities Act 2011 (the 2011 Act) and that an independent examination is needed.
Having satisfied myself that the charity is not subject to audit under company law and is eligible for independent examination, it is my responsibility to:
examine the financial statements under section 145 of the 2011 Act;
My examination was carried out in accordance with the general Directions given by the Charity Commission. An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts, and seeking explanations from you as trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit and consequently no opinion is given as to whether the accounts present a ‘true and fair view’ and the report is limited to those matters set out in the next statement.
Under Part 16 of the Companies Act 2006 the charity is taking advantage of its exception from have an audit.
to keep accounting records in accordance with section 386 of the Companies Act 2006; and
to prepare financial statements which accord with the accounting records, comply with the accounting requirements of section 396 of the Companies Act 2006 and with the methods and principles of the Statement of Recommended Practice: Accounting and Reporting by Charities;
to which, in my opinion, attention should be drawn in order to enable a proper understanding of the financial statements to be reached.
The Herefordshire and Gloucestershire Canal Trust Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is Beaumont House, 172 Southgate Street, Gloucester, Glos, GL1 2EZ.
The financial statements have been prepared in accordance with the H&G CT's governing document, the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (as amended for accounting periods commencing from 1 January 2016). The H&G CT is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the H&G CT. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the Trustees have a reasonable expectation that the H&G CT has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements. Interest received on restricted funds is apportion on a pro-rata basis.
Cash donations are recognised on receipt. Other donations are recognised once the H&G CT has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Legacies are recognised on receipt or otherwise if the H&G CT has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the H&G CT reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in income/(expenditure) for the year, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The H&G CT has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the H&G CT's balance sheet when the H&G CT becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the H&G CT’s contractual obligations expire or are discharged or cancelled.
In the application of the H&G CT’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Wharfinger and leaflets
Stocks for events
Health, Safety & Welfare
RBS Loan Interest
Insurance
Administration
Legal & Professional
None of the Trustees (or any persons connected with them) received any remuneration or benefits from the H&G CT during the year. Expenses are reimbursed to Trustees and officers as appropriate and when requested but the amounts involved are not material.
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxationof Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
All loans are secured by fixed charges over the land and property. There are also floating charges held over all of the charity assets.
As detailed in note 15 at 31 December 2023 the charity is owed £566,494 (2022 - £621,970) from The Wharf House Company Limited as an intercompany loan. The full value of the loan is £666,494 less a provision of £100,000 considered irrecoverable. In the period the Trust did not charge interest on the loan (2021 - 29,833)
H&G CT Ltd owns The Wharf House (TWH) Co Ltd which takes responsibility for repaying loans for purchase of Malswick House.
These financial statements are separate H&G CT financial statements at 31 December 2022.
Details of the H&G CT's subsidiaries at 31 December 2023 are as follows: