REGISTERED COMPANY NUMBER: |
REGISTERED CHARITY NUMBER: |
THE INVERCLYDE TRUST |
(A COMPANY LIMITED BY GUARANTEE) |
REPORT OF THE TRUSTEES AND |
UNAUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
REGISTERED COMPANY NUMBER: |
REGISTERED CHARITY NUMBER: |
THE INVERCLYDE TRUST |
(A COMPANY LIMITED BY GUARANTEE) |
REPORT OF THE TRUSTEES AND |
UNAUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
THE INVERCLYDE TRUST |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
Page |
Report of the Trustees | 1 | to | 4 |
Independent Examiner's Report | 5 |
Statement of Financial Activities | 6 |
Balance Sheet | 7 | to | 8 |
Notes to the Financial Statements | 9 | to | 13 |
THE INVERCLYDE TRUST (REGISTERED NUMBER: SC279698) |
REPORT OF THE TRUSTEES |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 29th February 2024. The trustees have adopted the provisions of 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). |
This report of the trustees meets the requirement for a directors' report as required by company law |
OBJECTIVES AND ACTIVITIES |
Objectives and aims |
The principal objects of the trust are to relieve poverty, distress or suffering in any part of the world, to promote the extension of religious belief and to promote any charitable purpose for the benefit of the community of Great Britain, the developing world or the environment. This is undertaken by granting substantially all of the annual income generated from a portfolio of mainly long term equities, though making donations out of capital has been the practice in recent years. |
ACHIEVEMENT AND PERFORMANCE |
Charitable activities |
All the grants made during the year continue to be focussed on the objects of the Trust, with the continued intention of providing some donees with long term multiyear support. There is an emphasis on supporting smaller charitable entities which are not able to compete with large charities to raise money, nor are spending substantial proportions of their income in the fund-raising process. These tend to be the largest recipients of support from the Trust. Notable amongst these are, as in recent years, AYDAP (school project in Liberia), Operation Mobilisation (street children project in Zambia), Navigators UK, and Scripture Union (Magnitude youth event). |
So, amongst the large grants was AYDAP (education, child protection, and welfare of children in Liberia) made to enable the development of the second school, having been built at the end of 2020 and been operating since then. Grants from the trust and another large Scottish foundation are being used to maintain enrolment levels to 100, and develop sustainability through an agriculture project. The Scripture Union Magnitude youth event attracts more than 700 young people. The Operation Mobilisation grant was to support the ongoing Mercy House provision for street children in Makalulu, Zambia, as we as a recently established Safe House for young girls. The Evangelical Alliance donation was in support of the Public Leaders programme. |
Grants exceeded by some margin the income generated by the portfolio during the year. |
Investment performance |
The core objectives of the funds of the Trust continues, namely to maintain (and increase over time) the income of the portfolio along with steady capital gain. The portfolio is split between a direct self-managed part, and one subcontracted to the M&G Charifund. The overall portfolio produced income of £89,391 in the trust's 2024 financial year, compared to £78,921 in 2023. |
The equity markets experienced a volatile 2023, with the impact of the war in Ukraine and conflict that developed after October in the Middle East. However, the period saw the peak of inflation and interest rates, and market mainly responded positively to strong US GDP recovery, and waning fears about recession. With much of the SAP500 performance being driven by its large technology stocks, the FTSE 100 and its lack of technology companies has led it most of the time to underperform at least the US indices. With the trust's orientation towards income generation, the low exposure to non income producing US equities, and high exposure to UK dividend payers, the portfolio like the FTSE100 failed to see large valuation increases. A substantial cash reserve provided some protection in these circumstances. The Trust's direct portfolio via investment trusts (around 50% of the direct portfolio), did not help performance as during periods of high interest rates the sector tends to trade at larger discounts to net asset value. Many retail investors are turning to the high yield attractions of both savings accounts and stocks or bonds, that have risen substantially along with interest rates. The trustees continue to believe that the investment trust sector will make a recovery in due course, and in the meantime are partly responsible for the increased income generation of the portfolio. |
THE INVERCLYDE TRUST (REGISTERED NUMBER: SC279698) |
REPORT OF THE TRUSTEES |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
FINANCIAL REVIEW |
Financial review |
The trust's net expenditure for the year to 29th February 2024 was £77,734. Included in this is the loss on investment assets of £124,368. The accumulated funds at 29th February 2024 are £1,885,183. The funds are held at this level to produce income to support the charitable activities. |
Reserves policy |
As part of its activities the trust sets out to be a long term supporter of certain projects or organisations that fulfil its objectives. To ensure that it can continue that support the trustees deem it appropriate to hold reserves, and primarily to use the income generated by those reserves, when invested, to support its activities. The trust does not raise funds from the public or third parties. All of its capital has been donated by the trustees and there is no certainty of that from year to year. At 29th February 2024 the trust had unrestricted reserves of £1,885,183. It is the opinion of the trustees that a minimum level of £1,000,000 in reserves is required to provide the income to support its activities for the long term. Utilisation of the reserves below that level to make grants would reduce the income generating base, and over time the ability to provide long term support. The reserves will be reviewed annually in the light of the development of the activities of the trust, but at present represent a strong buffer against market gyrations. |
Going concern |
The accounts have been prepared on the going concern basis. The justification for this is that the reserves held are sufficient to produce income to support the charitable activities. |
FUTURE PLANS |
The trust will continue to combine some long-term support for certain projects with one off or irregular support for new charitable activities. On the investment side, it is proposed to continue to split the portfolio between the outsourced portion with M&G Charifund and a more international selection of shares and investment trusts in the self-managed part. |
STRUCTURE, GOVERNANCE AND MANAGEMENT |
Governing document |
The trust is a company limited by guarantee governed by its Memorandum and Articles of Association dated 9th February, 2005. It is registered as a Scottish Charity. |
Recruitment and appointment of new trustees |
New trustees are recruited and appointed by the existing trustees in accordance with the Articles of Association as deemed necessary to meet the objects for which the charity was established. |
Organisational structure |
The trustees at 29th February, 2024 are as set out below and they have served for the full financial period. |
THE INVERCLYDE TRUST (REGISTERED NUMBER: SC279698) |
REPORT OF THE TRUSTEES |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
STRUCTURE, GOVERNANCE AND MANAGEMENT |
Risk management |
The annual review of the risks facing the trust was undertaken by the directors. The main risk is investment performance, and in particular income generation to support the grant making activity, as the trust does not undertake fund raising from third parties, and so relies upon the portfolio to generate the funds for making donations. The portfolio is diversified by holding both direct holdings and investment trusts (which themselves are highly diversified) in the own managed portfolio, generating an above market yield but not to the extent of hampering some capital growth. This portfolio is given an international 'tilt' given the dominance of UK holdings in the M&G Charifund portfolio, thus magnifying the diversification. The Charifund is higher yielding. |
The Trust has sought to achieve income through a 100% exposure to equities either via the M&G Charifund or in the direct portfolio (though the Charifund does have some fixed coupon exposure). In an era of very low interest rates this has produced a much better total return than could be achieved via bonds or gilts. This asset allocation is kept under review, and after a torrid time for fixed interest securities, with most continuing to fall in value in 2023, the trust will seek an exposure to this asset class, probably via collective vehicles. Once interest rates peak this should provide a good yield, some capital protection, and better returns than fixed interest has produced in the last couple of years. During the year the defensive cash balance was reduced as investment opportunities arose. |
Wherever possible as a matter of policy, the risk of making a donation to an entity with poor governance is mitigated by making the donations to UK registered charities. Regular contact is maintained with the key donees and reports are sought where appropriate. |
The risk of personal data breaches and not meeting the requirements of the General Data Protection Regulation introduced at the end of May 2018 is minimal as the trust holds no personal data on anyone another than the trustees as it does not raise money from the public. |
The Trust has substantial and largely liquid unrestricted reserves, and low operating costs, and is well positioned to manage the current global circumstances. |
REFERENCE AND ADMINISTRATIVE DETAILS |
Registered Company number |
Registered Charity number |
Registered office |
Trustees |
Company Secretary |
Independent Examiner |
Russell & Russell Business Advisers Limited |
4 Royal Crescent |
Glasgow |
G3 7SL |
THE INVERCLYDE TRUST (REGISTERED NUMBER: SC279698) |
REPORT OF THE TRUSTEES |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
REFERENCE AND ADMINISTRATIVE DETAILS |
Bankers |
Stockbrokers |
J.M. Finn & Co |
4 Coleman Street |
London |
EC2R 5TA |
This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies. |
Approved by order of the board of trustees on |
INDEPENDENT EXAMINER'S REPORT TO THE TRUSTEES OF |
THE INVERCLYDE TRUST |
I report on the accounts for the year ended 29th February 2024 set out on pages six to thirteen. |
Respective responsibilities of trustees and examiner |
The charity's trustees are responsible for the preparation of the accounts in accordance with the terms of the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended). The charity's trustees consider that the audit requirement of Regulation 10(1)(a) to (c) of the Accounts Regulations does not apply. It is my responsibility to examine the accounts as required under Section 44(1)(c) of the Act and to state whether particular matters have come to my attention. |
Basis of the independent examiner's report |
My examination was carried out in accordance with Regulation 11 of the Charities Accounts (Scotland) Regulations 2006. 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 I do not express an audit opinion on the view given by the accounts. |
Independent examiner's statement |
In connection with my examination, no matter has come to my attention : |
(1) | which gives me reasonable cause to believe that, in any material respect, the requirements |
- | 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 accounts which accord with the accounting records and to comply with Regulation 8 of the 2006 Accounts Regulations |
have not been met; or |
(2) | to which, in my opinion, attention should be drawn in order to enable a proper understanding of the accounts to be reached. |
Ann McNally FCCA |
The Association of Chartered Certified Accountants |
Russell & Russell Business Advisers Limited |
4 Royal Crescent |
Glasgow |
G3 7SL |
20th November 2024 |
THE INVERCLYDE TRUST |
STATEMENT OF FINANCIAL ACTIVITIES |
(INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT) |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
29.2.24 | 28.2.23 |
Unrestricted | Total |
fund | funds |
Notes | £ | £ |
INCOME AND ENDOWMENTS FROM |
Donations and legacies | 2 |
Investment income | 3 |
Total |
EXPENDITURE ON |
Charitable activities | 4 |
107,177 | 94,500 |
16,830 | 19,271 |
Total |
Net gains/(losses) on investments | ( |
) |
NET INCOME/(EXPENDITURE) | ( |
) | ( |
) |
RECONCILIATION OF FUNDS |
Total funds brought forward |
TOTAL FUNDS CARRIED FORWARD | 1,962,917 |
THE INVERCLYDE TRUST (REGISTERED NUMBER: SC279698) |
BALANCE SHEET |
29TH FEBRUARY 2024 |
29.2.24 | 28.2.23 |
Unrestricted | Total |
fund | funds |
Notes | £ | £ |
FIXED ASSETS |
Investments | 8 |
CURRENT ASSETS |
Debtors | 9 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 10 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
NET ASSETS |
FUNDS | 11 |
Unrestricted funds | 1,962,917 |
TOTAL FUNDS | 1,962,917 |
The charitable company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 29th February 2024. |
The members have not required the company to obtain an audit of its financial statements for the year ended 29th February 2024 in accordance with Section 476 of the Companies Act 2006. |
The trustees acknowledge their responsibilities for |
(a) | ensuring that the charitable company keeps accounting records that comply with Sections 386 and 387 of the Companies Act 2006 and |
(b) | preparing financial statements which give a true and fair view of the state of affairs of the charitable company as at the end of each financial year and of its surplus or deficit for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the charitable company. |
THE INVERCLYDE TRUST (REGISTERED NUMBER: SC279698) |
BALANCE SHEET - continued |
29TH FEBRUARY 2024 |
These financial statements have been prepared in accordance with the provisions applicable to charitable companies subject to the small companies regime. |
The financial statements were approved by the Board of Trustees and authorised for issue on |
THE INVERCLYDE TRUST |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
1. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) '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)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value, as modified by the revaluation of certain assets. |
The presentation currency of the financial statements is the Pound Sterling (£). |
Income |
All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably. Gift aid donations include the related income tax recoverable. |
Expenditure |
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that 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 been met at the year end date are noted as a commitment but not accrued as expenditure. |
Charitable grants |
Grants reflect amounts paid and payable in the accounting period. |
Fixed asset investments |
a) Investments are initially recognised at their transaction value and subsequently measured at their market value at the balance sheet date using the closing quoted market price. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year. |
b) All investment gains and losses are taken to the statement of financial activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value. Realised and unrealised investment gains and losses are combined in the Statement of Financial Activities. |
Taxation |
The trust has charitable status and is exempt from taxation on income and capital gains. Donations to the trust attract income tax relief for the donors. As the trust is not registered for value added tax such tax is not recoverable and is accordingly included in the expenditure. |
Financial instruments |
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
a) Basic debt financial assets and liabilities |
Debt financial assets and liabilities which comprise debtors and creditors, are receivable and payable within one year and recognised at the transaction price. |
At the end of each accounting period debt financial assets are assessed for impairment and their carrying value reduced if necessary. Any impairment charge is recognised in the statement of financial activities.. |
b) Fixed asset investments |
THE INVERCLYDE TRUST |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
1. | ACCOUNTING POLICIES - continued |
Financial instruments |
As indicated above in the separate accounting policy, fixed asset investments that are equity of the issuer are measured at fair value with gains or losses recognised in the statement of financial activities. |
2. | DONATIONS AND LEGACIES |
29.2.24 | 28.2.23 |
£ | £ |
Donations |
3. | INVESTMENT INCOME |
29.2.24 | 28.2.23 |
£ | £ |
Income from UK listed investments | 84,915 | 77,772 |
Interest receivable |
4. | GRANTS AND DONATIONS |
The grants paid to institutions were as follows: |
28.2.24 | 28.2.23 |
£ | £ |
Abernethy Trust | 5,000 | 5,000 |
African Youth Development Action Project - Liberia | 9,000 | 8,000 |
Association of Christian Counsellors | 2,000 | 2,000 |
British Red Cross | - | 7,000 |
Changing Lives Malawi | 4,000 | 4,000 |
Evangelical Alliance in Scotland | 8,000 | - |
Glasgow City Mission | 5,000 | 5,000 |
Home for Good | 7,000 | - |
Ibex Capital Trustee | 4,500 | - |
Interserve Great Britain and Ireland | 3,000 | 3,000 |
Music Education Partnership Group | 3,000 | 2,500 |
Navigators UK | 8,000 | 7,000 |
Operation Mobilisation | 10,000 | 9,000 |
Starfish South Africa | - | 5,000 |
SU Scotland - Soul Survivor | 14,677 | 14,000 |
Tearfund | 7,000 | - |
The Loss Foundation | - | 7,000 |
The Preshal Trust | 3,000 | 3,000 |
The Salvation Army | 5,000 | 3,000 |
The Trussell Trust | - | 3,000 |
World Vision | 9,000 | 7,000 |
107,177 | 94,500 |
THE INVERCLYDE TRUST |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
5. | SUPPORT COSTS |
Governance |
costs |
£ |
Support costs | 16,830 |
Support costs, included in the above, are as follows: |
29.2.24 | 28.2.23 |
Support | Total |
costs | activities |
£ | £ |
Management fees | 13,128 | 16,031 |
Independent examiner's fees | 1,361 | 1,296 |
Accountancy and tax fees | 2,341 | 1,944 |
16,830 | 19,271 |
6. | TRUSTEES' REMUNERATION AND BENEFITS |
Management fees comprise an amount charged by Barnellan Equity Advice Limited for management services rendered during the year of £13,128 (2023: £16,031). G. Burns is a director in this business. |
There was no trustees' remuneration paid for the year ended 29th February, 2024 nor for the year ended 28th February, 2023. |
Trustees' expenses |
There were no trustees' expenses paid for the year ended 29th February 2024 nor for the year ended 28th February 2023. |
7. | STAFF COSTS |
The company had no employees during the year. |
8. | FIXED ASSET INVESTMENTS |
Listed |
investments |
£ |
MARKET VALUE |
At 1st March 2023 |
Additions |
Disposals | ( |
) |
Revaluations | ( |
) |
At 29th February 2024 |
NET BOOK VALUE |
At 29th February 2024 | 1,632,459 |
At 28th February 2023 | 1,808,061 |
There were no investment assets outside the UK. |
THE INVERCLYDE TRUST |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
8. | FIXED ASSET INVESTMENTS - continued |
Cost or valuation at 29th February 2024 is represented by: |
Listed |
investments |
£ |
Valuation in 2024 | 1,632,459 |
9. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
29.2.24 | 28.2.23 |
£ | £ |
Amount owed by stockbroker |
Income tax recoverable | 16,335 | - |
10. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
29.2.24 | 28.2.23 |
£ | £ |
Trade creditors |
Accruals and deferred income |
11. | MOVEMENT IN FUNDS |
Net |
movement | At |
At 1.3.23 | in funds | 29.2.24 |
£ | £ | £ |
Unrestricted funds |
General fund | 1,962,917 | (77,734 | ) | 1,885,183 |
TOTAL FUNDS | (77,734 | ) | 1,885,183 |
Net movement in funds, included in the above are as follows: |
Incoming | Resources | Gains and | Movement |
resources | expended | losses | in funds |
£ | £ | £ | £ |
Unrestricted funds |
General fund | 170,641 | (124,007 | ) | (124,368 | ) | (77,734 | ) |
TOTAL FUNDS | ( |
) | ( |
) | (77,734 | ) |
THE INVERCLYDE TRUST |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 29TH FEBRUARY 2024 |
11. | MOVEMENT IN FUNDS - continued |
Comparatives for movement in funds |
Net |
movement | At |
At 1.3.22 | in funds | 28.2.23 |
£ | £ | £ |
Unrestricted funds |
General fund | 1,972,048 | (9,131 | ) | 1,962,917 |
TOTAL FUNDS | 1,972,048 | (9,131 | ) | 1,962,917 |
Comparative net movement in funds, included in the above are as follows: |
Incoming | Resources | Gains and | Movement |
resources | expended | losses | in funds |
£ | £ | £ | £ |
Unrestricted funds |
General fund | 78,921 | (113,771 | ) | 25,719 | (9,131 | ) |
TOTAL FUNDS | 78,921 | (113,771 | ) | 25,719 | (9,131 | ) |
12. | RELATED PARTY DISCLOSURES |
As mentioned in the financial review on page 2, all capital has been donated by trustees. The donation made during the year of £81,250 was donated by the trustees.These donations have no conditions attached. |