The trustees who are also directors present their annual report and financial statements for the year ended 31 August 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), 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) (effective 1 January 2019)".
Governing Document
Garvald West Linton Limited is a charitable company limited by guarantee and is governed by its Memorandum and Articles of Association dated 1976, amended Articles of Association adopted 25 November 2017. The liability of each member is limited to £1. It is a registered charity with the Office of the Scottish Charity Regulator (OSCR) and its residential and day service is registered and monitored by the Care Inspectorate.
The directors who served during the year and up to the date of signature of the financial statements are detailed below. In terms of the Articles of Association, 2 directors retire by rotation and need re-elected. During the period two new director’s were appointed and two retired.
Directors did not receive any remuneration.
Directors
Steven Whalley (Chair)
Mike Casey
Sydney Smith (resigned 23/7/24)
Vincent D'Agostino
Gillian Learmonth (resigned 25/3/25)
Rennie Gardner
Sophie Pilgrim (appointed 2/4/24)
Hannah Cairns (appointed 2/4/24)
Secretary
Craig McGregor
Chief Executive Officer (CEO)
Craig McGregor
Appointment of new Directors
Directors are elected at the Company’s Annual General meeting and can be appointed during the year by the Board of Directors. A Director shall be entitled to hold office for three years and is eligible for re-election.
Recruitment of new Directors
The Directors are recruited to maintain a balance of skills within the Board. Most appointments come from parties who already know the work of Garvald West Linton and who have visited and attended events held at Garvald. The number of directors now stands at five and we are actively seeking new recruits with the skills we need at Board level.
Induction and Training of Directors
New directors are briefed on their legal obligations under charity law, the content of the Memorandum and Articles of Association, the committee and decision-making processes, and recent performance of the charity. Directors are encouraged to attend appropriate external training events where these facilitate the undertaking of their role. A new directors induction programme is now in place.
Structure
The Board of Directors appoints the CEO, Residential, Manager, Day Service Manager, Finance Manager, and other key management posts and is available to assist on more complex issues. The managers are responsible for placement of residents, the engagement and training of staff and the day to day management of the Residential Home and Day Service. The Finance Manager reports to the CEO and the Board of Directors. The Directors meet on six occasions a year to receive management and financial reports from the CEO, Residential Manager, Finance Manager and Day Services Manager.
Key Management Remuneration Policy
The key management of the charity during the year consisted of the CEO, Residential Manager, Day Service Manager and Finance Manager. Salaries are reviewed each year in line with Local Authority/COSLA pay settlements.
Risk Management
The Board have identified and addressed the following main risk areas facing the charity as follows:
The requirement to comply with legislation, regulations, standards & guidance for residential and day care of adults with additional support needs: The residential care home and day services are led by an experienced management team and trustees and are subject to external inspection by regulatory bodies including local authorities, The Care Inspectorate and Fire and Rescue Services. Further to this there is a series of internal quality audits as part of the quality assurance system.
Financial risks have arisen due to continued high rates of inflation and Budget/Employers NI changes, leading to a significant rise in the cost base. This is being mitigated by efforts to increase both the number of places available and the number of day service users, together with ongoing improvements in cost controls
The risk to recruit suitable staff in the social care sector increased following the UK decision to leave the European Union along with more local factors such as ongoing poor rate of pay, perceived complexity of the roles and Garvald West Linton’s geographical remoteness. This continues to be mitigated by use of the UK Visas and Immigration Sponsorship License Scheme which has assisted the organisation to maintain adequate numbers of staff.
The directors regularly review all risks to which the charity is exposed and the procedures in place to manage these risks. The company risk register was updated and a substantial review took place. All risk factors have been graded in terms of likelihood to occur, impact, control procedure and responsibility.
Garvald West Linton offers care, support and training in both residential and day settings for adults with learning disabilities. The organisation is founded on the Philosophy of Rudolf Steiner
There are five houses for residents and staff and in addition, a varied day centre provision of workshops and other activities both within Garvald West Linton and in the local community.
The number of residents increased by 1 in this year to 32. There are currently 10 non-residents using the Day Services.
Fees rates were increased by 7.24% by local authorities to ensure that Garvald West Linton staff would earn the Real Living Wage. Not all local authorities increased the fees to cover the previous year’s inflationary increase. Fees are set by our Home Local Authority and others should follow per the COSLA agreement.
Recruitment has improved due to our successful application for and management of a UKVI Sponsorship Licence. This has brought us 17 staff from around the world.
Despite the ongoing social care crisis we have continued to show sector leading levels of staff retention and sickness absence throughout the year – further credit to all our staff.
The financial statements follow on pages 9 to 27. These statements are prepared in terms of the Charities SoRP FRS 102 and the Companies Act 2006.
The charity had total incoming resources on its Operations Fund of £3,797,777 (2023: £3,338,496) and total expenditure of £3,540,552 (2023: £3,451,995), resulting in an operating surplus for the year of £257.225 (2023 deficit of £113,499).
The designated funds had incoming resources of £nil (2023: £1,000) and total expenditure of £93,109 (2023: £161,587), resulting in a deficit before transfers of £93,109 (2023 : £160,587).
Cost saving measures along with a much appreciated Rent Holiday from Garvald Trust resulted in a surplus for the year of £192,902 (2023 Deficit : £273,602) An increase in additional support hours some of which were backdated from the previous year also contributed. Some Property Maintenance was postponed and will affect future years.
The financial year has been challenging with the continued inflationary impact on a relatively fixed cost base. There have been added costs in relation to staff recruitment from abroad, although this has resulted in a reduction in staffing shortages.
The current policy is to maintain free reserves sufficient to fund the equivalent of six months expenditure. The Directors acknowledge that they have not reached this target but are working on a Strategic Supported Living Plan to enable surpluses in future years to meet a revised but more realistic objective. The increase in this financial period to August 2024 is £167,951 (2023 decrease: £237,338).
An analysis of Net Assets between Reserve Funds is disclosed in note 19 of the accounts.
The designated funds represent expenditure made on fixed assets less depreciation and less liabilities outstanding on their acquisition - £1,286,580 and the Inheritance Fund of £30,688.
At 31 August 2024 free reserves amounted to £706,799, (2023: £538,848) which is equivalent to 20% of annual expenditure or expenditure for just over 2 months.
In response to significant changes to the economic legislative and environmental conditions the organisation has developed a new 5 year strategic plan. The following strategic objectives have been agreed;
Secure the future of Garvald through sound finances.
Move to a supported living model for the people we support.
Identify additional meaningful daytime activities.
Provide an environment where staff feel valued.
Improve the infrastructure within Garvald.
Work more closely with organisations where there are synergies.
Develop communications that reflect Garvald’s strengths and aspirations.
There are a number of longstanding building and maintenance projects that will require to be completed in the new financial year and will require substantial funding. We are exploring formal fundraising resource for these
We are planning to renovate one of our vacant buildings, The Lodge to reduce the numbers in the other houses to the Care Inspectorate’s recommended maximum of 6 The Garvald Trust remain entirely supportive of Garvald West Linton and have confirmed the majority of this funding requirement.
The charity plans to work towards a change in registration and funding streams by moving towards a supported living service. It is predicted that this will allow us to ensure long-term viability while giving residents both greater rights over their housing and consistent access to the benefits that adults out-with the residential care setting receive.
The directors, who also act as trustees for the charitable activities of Garvald West Linton Ltd , are responsible for preparing the Directors' 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 directors 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 directors 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 directors 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.
In accordance with the company's articles, a resolution proposing that Thomson Cooper be reappointed as auditor of the company will be put at a General Meeting.
The Trustees are of the opinion that there are no significant Post Balance Sheet Events that would have an impact on charity’s assets.
The directors' report was approved by the Board of Directors.
Opinion
We have audited the financial statements of Garvald West Linton Ltd (the ‘charity’) for the year ended 31 August 2024 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. 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 (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
We have nothing to report in respect of the following matters in relation to which the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:
the information given in the financial statements is inconsistent in any material respect with the directors' report; or
proper accounting records have not been kept; or
the financial statements are not in agreement with the accounting records; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with the Act and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: existence and timing of recognition of grant income and the posting of transactions to the correct funds. We discussed these risks with management, designed audit procedures to test the timing and existence of donations and grant income, including reviewing of grant paperwork and terms and conditions, reviewing the allocation of costs against the correct funding and reviewed areas of judgement for indicators of management bias.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the officers and other management (as required by the auditing standards). We focused on specific laws and regulations which may have a direct material effect on the financial statements or operation of the charity, including the Charities and Trustees Investment (Scotland) Act 2005, regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended),
We assessed the extent of compliance of the laws and regulations identified above by inspecting any legal correspondence, the Care Inspectorate report and making enquiries of management.
We reviewed the laws and regulations in areas that directly affect the financial statements including financial and taxation legislation and considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.
With the exception of any known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the company.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. However, the primary responsibility for the prevention and detection of fraud rests with the trustees. To address the risk of fraud we identified internal controls established to identify risk, performed analytical procedures to identify unusual movements, assessed any judgements and assumptions made in determining accounting estimates, reviewed journal entries for unusual transactions and identified related parties.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charity’s trustees, as a body, in accordance with Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charity’s trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
Thomson Cooper is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
Investments
The statement of financial activities includes all gains and losses recognised in the year.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Designated
Investments
Garvald West Linton Ltd is a private company limited by guarantee incorporated in Scotland. The registered office is Garvald House, Dolphinton, West Linton, EH46 7HJ.
Unrestricted funds are available for use at the discretion of the directors 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.
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.
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.
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.
Designated
Designated
Residential and care fees
Sale of residents work and produce
Investments
Other staff costs
Establishment costs
Household costs
Resident costs
Other costs
Property upkeep
Gain/Loss on sale of assets
The average monthly number of employees during the year was:
The key management personnel of the charity comprise the CEO, day services manager, residential manager, and finance manager. Their total cost including employer’s pension and national insurance contributions was £185,795 (2023: £177,882).
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The loan granted by Garvald Trust is funded by Royal Bank of Scotland with an interest rate 2.75% above libor.
The total capital repayments on the loan is £688,027 commencing 29 July 2013 with 52 quarterly payments.
There are no loan payments due after five years (2023 : £nil).
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 income funds of the charity include restricted funds comprising the following unexpended balances of donations and grants held on trust for specific purposes:
Oil bath fund
To fund the building of an oil bath and cabin.
Hill Cottage fund
To fund special requests for expenditure within Hill Cottage.
Linden fund
To fund special requests for expenditure within Linden House.
Rowan fund
To fund special requests for expenditure within Rowan House.
Willow fund
To fund special requests for expenditure within WillowHouse.
The Orcome trust
To fund honey bee keeping.
The Sensory room
To fund a sensory room, £1,000 grant was requested post year end and received December 2024 to cover expenditure.
Roger Raymond Charitable Trust
Towards new build fund; the new build project was discontinued and Roger Raymond Charitable Trust agreed that the funds could be allocated towards the Lodge renovations.
80th Birthday Celebrations
Fundraising to raise funds for outdoor space.
RS MacDonald Charitable Trust
Grant funding for replacement ramp.
Cruden Foundation
Funding towards music therapy.
This fund is unrestricted and free to use in accordance with the objectives of the charity.
Incoming resources
Resources expended
Transfers
Incoming resources
Resources expended
Transfers
The income funds of the charity include the following designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes:
Fixed asset fund
This fund represents a fund set aside by the Directors to be equal to expenditure made less depreciation provided on fixed assets and less liabilities outstanding on their acquisition.
Adler Fund
This fund is a legacy received from the estate of Robin Adler which the directors have allocated to the future development of Garvald.
Inheritance Fund
This fund is legacies received from the estate of Eon Grindlay and Jean Horsburgh which the directors have allocated to the future development of Garvald.
Savings Fund
This fund is fundraising monies which the directors have allocated to future costs, the Directors agreed to transfer the funds to the 80th Birthday Funds.
The operating leases payments represent rentals payable by the charity for it's properties.
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The charity has a lease on the property which extends up to June 2037, a rent holiday was agreed for 2024 with no annual charge recognised (2023 - £33,000).
During the year the charity there were no transactions with Trustees (2023 the charity purchased services under normal business terms from Craig Allardice a trustee until August 2023 totalling £4,507).