The trustees present their annual report and financial statements for the year ended 31 March 2024.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) 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) (effective 1 January 2019)".
The charity's objects are to preserve, conserve and develop Knockando Woolmill, including its historic textile plant and machinery, and its immediate surroundings and watercourses as a historic rural working woolmill, to preserve the traditional rural craft skills used in a rural woolmill by providing training in those skills and by other appropriate means and specifically through:
Promoting the heritage and historic significance of the Woolmill;
Educating the general public about the heritage and historical significance of the Woolmill;
Renovating and improving the existing mill buildings, textile plant and machinery, land and watercourses so that they may continue to function as a working rural woolmill and historical landmark; and
The wholesale and retail sale of products manufactured at the Woolmill and items incorporating products manufactured at the Woolmill.
As reported in last year's Financial Statements and Trustees' Report, the Trust's wholly owned trading subsidiary Knockando Woolmill Company Limited (the 'Company') ceased trading on 30 September 2022, the end of the 2022 season, and its employees were transferred to the Trust. Since then the Trust itself has continued to trade in place of the Company and to operate the Visitor Centre in addition to pursuing its charitable objectives.
During the financial year the Woolmill continued to operate as an attraction to visitors who were able to learn about the heritage and historic significance of the Woolmill.
The Visitor Centre and coffee shop opened to the public for the summer season from 16 May 2023 until the end of September that year and proved popular with visitors from near and far.
Visitors to the Woolmill in the summer of 2023 were able to enjoy our newly refurbished classroom. Situated separately from the main site the space is an ideal place from which to view the Woolmill from a different perspective, overlooking as it does the Visitor Centre, Cottage, Mill House and Shop. With the help of a donation of £1,100 from The Budge Foundation this space was transformed into a warm and inviting area, designed to facilitate educational workshops, tour groups, design meetings and seating area for our visitors. The Trustees are very grateful to The Budge Foundation for their support of this project.
Throughout the financial year the Trust was supported by a supplementary grant from the Organisational Support Fund: 2023 of Historic Environment Scotland ('HES') for which the Trustees wish to record their sincere thanks.
The Trust also received financial support in the form of a donation of £5,000 from the Tam O'Shanter Trust and a separate donation of £5,000 from the MacRobert Trust, for both of which donations the Trustees are very grateful.
The Trustees were pleased to be able to add to their numbers in February this year when Ms Andrea Chappell, a bespoke kiltmaker from Forres and Mr Antony McCord, a former RAF Officer from Roseisle in Moray, joined the Board as Trustees.
In November 2022 the Trustees began a search for trainee weavers with substantial financial support from the William Grant Foundation. The search was successful in identifying two potential trainees who each accepted an offer of a traineeship in April this year and a more detailed progress report on their training will be included in next year's Trustees' Report.
A substantial part of the cost of employing and training the new trainees will be borne by the grant from the William Grant Foundation referred to above. The Foundation has been a regular supporter of the Woolmill over a number of years and the Trustees wish to record their sincere thanks for this.
The Trust's principal sources of income during the financial year were supplemental grants from HES (£180,430). This means the total net figure for grants received in the financial year amounted to £180,430.
In addition the Trust received donations and legacies during the financial year of £14,210.
The Trustees are most grateful to all of its donors and volunteers without whose generous assistance the Trust would not be able to continue with all of its charitable activities.
During the year, the Trust operated a net loss of £44,246 including depreciation of £74,712 on assets owned by the Trust.
The Trust's debtors total £3,178 (FY2022/2023: £1,940) as detailed in note 14.
It is the policy of the charity that cash from donations which have been made for a specific purpose such as the purchase of an identified piece of plant and machinery should be retained as a cash reserve until a suitable purchase is identified and made.
The Trust's policy on other reserves is not to make a general reserve from the income of any financial year and only to make a specific reserve from income against an identified liability which the trustees consider is reasonably likely to occur. In the Trustees' judgement no such specific reserve was required in respect of its financial year 2023/2024.
The trustees have assessed the major risks to which the charity is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
During the financial year the trustees worked closely with HES to identify a sustainable operating model for the Trust to achieve its charitable objects in relation to the Woolmill. This largely involved :
The development of an operational plan for the two financial years to 31 March 2025 and 31 March 2026 respectively, including cashflow forecasts for those financial years.
Identifying sources of funding the new operational plan in addition to any funding to be considered by HES, principally by achieving a blended income model which would include a number of components such as earned income through retail, tours and events; grants through the public sector and the lottery, trusts and foundations; and donations and legacies.
The resulting Knockando Woolmill Trust operational plan for 2024/25 sets out a refreshed vision for the Trust which looks to focus primarily on the retention and sharing of traditional skills within the historic setting of the Woolmill.
The Trust intends to achieve its more sustainable business model by continuing to develop partnerships and to adopt a blended income model which balances the opportunities to generate earned income through retail and visitors, alongside a continued focus on fundraising.
The financial year 2024/2025 will continue to see a transition in the operations of the Woolmill as skills are developed and enhanced to reflect the new model across the organisation, including the board of trustees, as well as ensuring that the heritage assets are conserved.
The continuation of the charity as a going concern depends on continued support from HES, and donors.
The charity is a company limited by guarantee as defined by the Companies Act 2006 and is controlled by its governing document, namely its Memorandum and Articles of Association.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
The trustees have no formal procedure for identifying and recruiting additional and replacement trustees but rely on suitable candidates being identified and approached by existing trustees from time to time.
The trustees meet regularly as a board of directors of the Trust, normally once a quarter when the business of the Trust is considered and discussed. At these meetings the trustees receive operational reports from the Woolmill’s operations director and other staff.
The trustees, who are also the directors of Knockando Woolmill Trust for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company Law 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 and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees' report was approved by the Board of Trustees.
I report on the financial statements of the charity for the year ended 31 March 2024, which are set out on pages 6 to 16.
The charity’s trustees, who are also the directors of Knockando Woolmill Trust for the purposes of company law, are responsible for the preparation of the financial statements in accordance with the terms of the Charities and Trustee Investments (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. The trustees consider that the audit requirement of Regulation 10(1)(a) to (c) of the 2006 Accounts Regulations does not apply. It is my responsibility to examine the financial statements as required under section 44(1)(c) of the Act and to state whether particular matters have come to my attention.
My examination is carried out in accordance with Regulation 11 of the 2006 Accounts Regulations. An examination includes a review of the accounting records kept by the charity and a comparison of the financial statements presented with those records. It also includes consideration of any unusual items or disclosures in the financial statements, and seeks explanations from the trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit and consequently I do not express an audit opinion on the view given by the financial statements.
In connection with my examination, no matter has come to my attention:
to keep accounting records in accordance with section 44(1) (a) of the 2005 Act and Regulation 4 of the 2006 Accounts Regulations; and
to prepare financial statements which accord with the accounting records and comply with Regulation 8 of the 2006 Accounts Regulations;
to which, in my opinion, attention should be drawn in order to enable a proper understanding of the financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Knockando Woolmill Trust is a private company limited by guarantee incorporated in Scotland. The registered office is The Woolmills, Knockando, Aberlour, Moray, AB38 7RP.
The financial statements have been prepared in accordance with the charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) 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) (effective 1 January 2019)". The charity is a Public Benefit Entity as defined by FRS 102.
The charity has taken advantage of the provisions in the SORP for charities applying FRS 102 Update Bulletin 1 not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the charity. 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 charity 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 or grantors 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.
Cash donations are recognised on receipt. Other donations are recognised once the charity 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.
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.
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.
Grants offered subject to conditions which have not yet been met at the year end date are noted as a commitment but not accrued as expenditure.
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:
Freehold land is not depreciated.
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 charity 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).
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.
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 charity 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 charity's balance sheet when the charity 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 charity’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Consolidated financial statements
The financial statements present information about the charity as an individual undertaking and not about its group as the charity and its subsidiary undertaking comprise a small sized group.
Grants received
Charitable activity income
Woolmill development and conservation
Sale of goods
Employment allowance
Marketing costs
Repairs and maintenance
Heat and light
Telephone
Computer and software charges
Postage
Cost of sales
"Cut, Make and Trim" expenses
Rent and rates
Consultancy
Bank charges
Travel expenses
Bad debts
Sundry expenses
During the year there were no donations received from trustees.(2023 - Nil).
The average monthly number of employees during the year was:
The remuneration of key management personnel was as follows:
The key management personnel of the charity are the Administrator, the Marketing Manager and the Coffee Shop Manager.
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
Knockando Woolmill and the ground at Aberlour are secured by standard securities over the company' properties by Moray Council and The Scottish Ministers.