The trustees present their annual report and financial statements for the year ended 31 March 2025.
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 the provision of respite care and to provide accommodation, domiciliary and day services within the community for "persons in need" as interpreted by Section 94 of the Social Work (Scotland) Act 1968; to provide, improve, repair, maintain and manage housing; to act as trustees or agents for or to manage money, grants or other assistance received from statutory bodies; and to make charitable donations for the furtherance of respite care.
The company has met its charitable activities in recent years by operating and managing Seaforth House near Dingwall. Its main sources of funding arise from charges made for the provision of these services at Seaforth House.
As reported below, the accumulated surplus on the unrestricted funds at 31 March 2025 was £237,875 compared to 31 March 2024 £255,116. The trustees have examined the charity's requirements for reserves in light of the nature of the charity's work and consider that unrestricted funds should amount to around two months of its operating costs.
The year ending 31 March 2025 saw unrestricted incoming resources increase by £63,189 from £1,004,298 to £1,067,487. Costs increased by £75,326 thus recording a deficit for the year of £17,241 compared to 2024 deficit of £5,104. Restricted expenditure was £2,000 and limited to depreciation on restricted assets.
The accumulated surplus on the unrestricted funds at the year end amounted to £237,875 (2024 - £255,116). The accumulated surplus on restricted funds at the year end amounted to £70,000 (2024 - £72,000). Net assets at 31 March 2025 amounted to £307,875 (2024 - £327,116).
The trustees are of the opinion that the charitable company is a going concern.
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 in place to provide reasonable assurance against fraud and error. The trustees examine the major risks to which the charity is liable on a regular basis and where appropriate, systems and procedures have been established to mitigate any risks identified.
The trustees have identified financial stability as a major financial risk. The continued support of the trustees and of Fairburn House Limited ensures sufficient working capital for the company.
Non-financial risks arise from the receipt of an unfavourable report from the Care Inspectorate, and from fire, health and safety of both staff and residents. These risks are managed by ensuring that all laws and regulations pertaining to the company are adhered to and good policies and procedures are in place. IT risks are managed by the use of password protection and the regular backing up of information.
No changes to the current activities are expected in the near future.
Governing document
The charity is a company limited by guarantee, incorporated and registered as a charity on 13 October 1992. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity. The company is governed by 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:
Recruitment and training of new trustees
The directors of the company are also the charity trustees for the purpose of the charity. New trustees are recruited by existing trustees if required. New trustees are provided with the Office of the Scottish Charity Regulator booklet - Guidance for Charity Trustees "acting with care and diligence".
Organisational structure
The management structure comprises the trustees and secretary detailed below. The trustees make strategic decisions as and when required and the manager is responsible for the day to day operations of the company. Fairburn House Limited provides administrative services to the company.
Key management remuneration
The directors consider the board of directors, who are the Charity's trustees, and the manager, Ms B S Davison, comprise the key management personnel of the charity. Ms B S Davison received £2,000 (2024 - £7,101) in the year for services carried out as an employee and not for her role as a trustee.
Related parties
None of our trustees receive remuneration or other benefit from their role as trustees of the charity.
The charity has an unsecured loan from Fairburn House Limited, a company whose directors include 3 of the trustees of Seaforth House Limited.
The trustees, who are also the directors of Seaforth House Limited 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 Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 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 MacKenzie Kerr Limited be reappointed as auditor of the company will be put at a General Meeting.
The trustees' report was approved by the Board of Trustees.
Opinion
We have audited the financial statements of Seaforth House Limited (the ‘charity’) for the year ended 31 March 2025 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 the provisions available for small entities, in the circumstances set out in note 21 to the financial statements and Provisions Available for Smaller Entities 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the trustees' 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 trustees 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 trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and
the directors' report included within the trustees' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:
proper accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of trustees' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the trustees' report and from the requirement to prepare a strategic report.
As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose of company law, 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 trustees 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 trustees 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 trustees 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 under the Companies Act 2006 and report in accordance with the Acts 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 assessed the susceptibility of the company's financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the Responsible Individual (RI) drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the RI's review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, and to the charitable company’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 charitable company’s members and 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 charitable company, the charitable company’s members as a body and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
MacKenzie Kerr Limited 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.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Seaforth House Limited is a private company limited by guarantee incorporated in Scotland. The registered office is Fairburn House, Urray, Muir of Ord, Ross-shire, IV6 7UT.
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), FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "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 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 year end, the company had net current liabilities of £422,124 (2024 - £426,897). The company's main creditor, Fairburn House Limited has agreed not to recall its loan until the company is in a position to repay it without compromising its ability to pay other liabilities. As a result, the trustees feel it is appropriate to prepare the accounts on a going concern basis.
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.
Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received. Care Home fees are included on an accruals basis and represent the amount receivable from the provision of respite care.
Income from government and other grants, whether capital or revenue grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably.
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.
Fixed assets are stated at historic cost, being purchase price, less accumulated depreciation. The cost of minor additions or those costing below £200 are not capitalised.
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 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. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
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.
Charitable activity income
Provision of respite care
Provision of respite care
Care home fees
Other
Charitable activity grants
Food and provisions
Hired in labour
Staff training
Other staff costs
Care inspectorate
Medical and cleaning
Uniforms and linen
B S Davison remuneration from the charity of £2,000 (2024 - £7,101). This related to services carried out as an employee, and not for the role as a trustee.
The average monthly number of employees during the year was:
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
The restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.
Funds
Biomass heating system fund - a grant was received towards the cost of the biomass heating system. The system was purchased several years ago and the resources expended in the year of £2,000 relate to the depreciation of the system.
Solar panel fund - a grant has been received towards the purchase of solar panels. This grant remains unspent at the year end.
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.
Fairburn House Limited:
A company which shares 3 directors with the charity.
Included in creditors is an unsecured loan of £423,936 (2024 - £392,718) from Fairburn House Limited. This loan is repayable on demand, unsecured and attracts interest at a rate of 3% above base. Interest of £31,218 (2024 - £29,176) was charged on the loan during the year.
Seaforth House Limited also purchased services of £36,672 (2024 - £31,225) from Fairburn House Limited, and at the balance sheet date, the company owed £2,712 (2024- £1,684) to Fairburn House Limited.
Fairburn House Limited also purchased services from Seaforth House at a cost of £4,888 (2024 - £4,893) and at the balance sheet date Fairburn House Limited owed £Nil (2024 - £625). These amounts are considered normal trade debts.
Fairburn Activity Centre Limited:
At the balance sheet date included in other debtors is a loan to Fairburn Activity Centre of £13,526 (2024 a credit balance of £21,263 included in other creditors). This loan is unsecured, interest-free and has no fixed repayment terms.
The charity also purchased services of £742 (2024 - £449) from Fairburn Activity Centre Limited and provided services of £Nil (2024 - £Nil) to Fairburn Activity Centre Limited. At the balance sheet date, the charity owed Fairburn Activity Centre £Nil (2024- £112). This amount is considered a normal trade debt.
Clifford Davison:
A trustee of the charity.
At the balance sheet date, the charity owed C Davison a loan of £85,000 (2024 - £85,000). This loan is unsecured, interest free and has no fixed terms of repayment.
The company contributes to defined contribution pension schemes on behalf of its employees. The assets of these schemes are held separately from those of the company in independently administered funds. During the period contributions payable amounted to £13,127 (2024 - £11,220). At the end of the financial year, unpaid contributions totalled £2,180 (2024 - £2,011).
In common with many businesses of our size and nature we use our auditor to assist with the preparation of the financial statements.