The West Harris Trust - Charities report - 21.2

REGISTERED COMPANY NUMBER: SC347176 (Scotland)

REGISTERED CHARITY NUMBER: 041920

REPORT OF THE TRUSTEES AND

UNAUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR

THE WEST HARRIS TRUST

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

19

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 31 December 2020. 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).

OBJECTIVES AND ACTIVITIES

Objectives and aims

The charity has been formed to benefit the crofting community of West Harris defined as those persons resident in the crofting townships of Borve (Harris), Horgabost & Seilebost, Luskentyre and Scaristavore or being tenants of crofts in any of the aforementioned crofting townships.

The main objectives of the charity are:-

- to advance rural regeneration of the crofting community of West Harris;

- to manage community land and associated assets for the benefit of the crofting community of West Harris and the public in general following principles of sustainable development, where sustainable development means development which meets the needs of the present without compromising the ability of future generations to meet their own needs;

- to advance the education of the crofting community of West Harris about its environment, culture, heritage and/or history;

- to advance environmental protection or improvement including preservation, and conservation of the natural environment, the promotion of sustainable development, the maintenance, improvement or provision of environmental amenities for the crofting community of West Harris and/or the preservation of buildings or sites of architectural, historic or other importance to the crofting community.

Significant activities

During the year, the charity constructed seven additional campervan hook-ups on the estate and secured funding for phase one of the Seilebost School redevelopment.

As a result of the restrictions brought about by the COVID-19 pandemic, Talla na Mara was closed for several months during 2020 and staff either worked from home or were furloughed, with financial aid in the form of grants limiting the impact of restrictions.

Volunteers

The contribution of volunteers (including directors, members and individuals from the community) has been, and continues to be, of immense benefit to the charity.

ACHIEVEMENT AND PERFORMANCE

- continued to administer, manage and maintain the West Harris estates;

- worked with those allocated to house plots to facilitate their self-build plans;

- worked with agencies to advance broadband connectivity across the estate;

- secured funding for phase one of the Seilebost School redevelopment, including improved sanitary and campervan facilities;

- secured funding for a two year project to reduce social isolation and remove barriers to participation;

- developed plans for a facilities block at Pairc Niseaboist;

- developed plans for a horticulture project, including a community Polycrub.

FINANCIAL REVIEW

Principal funding sources

The charity is dependent on grants, rental and estate income and fundraising to fund its operational costs. Apart from rental and estate income and fundraising, the principal funding sources for the charity during the year were grants administered by Comhairle nan Eilean Siar, including COVID recovery grants and the Crown Estate Fund.

Investment policy and objectives

The charity's reserves are maintained in bank accounts as the current level of reserves are required to meet the trust's short term operational requirements.

Reserves policy

The general fund represents the unrestricted funds from past operating results. It also represents the free reserves of the charity. The trustees consider that the level of the free reserves in unrestricted funds at 31 December 2020, which equates to approximately nine months operating expenditure, is sufficient to meet the charity's operational requirements given the ongoing assistance being received from public funding agencies.

During the year the charity's income exceeded expenditure resulting in net income of £6,221 for the period (2019 - net expenditure of £42,711). This results in an increase of £78,942 in unrestricted funds and an decrease of £72,721 in restricted funds. Unrestricted reserves has as a result increased to £311,590.

The decrease in restricted funds relates mainly to depreciation in connection with the Community Enterprise Centre project.

FUTURE PLANS

The charity's plans for the forthcoming year include:-

- the ongoing management and development of the West Harris estates;

- deliver phase one of the Seilebost School refurbishment and investigate options for phase two;

- extend facilities at Talla na Mara;

- improve existing campervan facilities;

- work with agencies to develop further affordable housing in the area.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The Trust is a charitable company limited by guarantee, incorporated on 15 August 2008 and registered as a charity with effect from 24 November 2010. The company was established under a Memorandum of Association which established the objects and powers of the charitable company and is governed under its Articles of Association. In the event of the company being wound up members are required to contribute an amount not exceeding £1.

Recruitment and appointment of new trustees

The directors of the company are also charity trustees for the purposes of charity law.

Under the terms of the Memorandum and Articles of Association the Elected Directors are appointed by the ordinary members at the Annual General Meeting. One third of the Elected Directors must retire by rotation at each Annual General Meeting.

The Nominated Members of the charity are also entitled to appoint Nominated Directors to represent them on the board.

Organisational structure

The board consists of voluntary directors who manage the affairs of the charity through regular board meetings. The charity's management team who assist in the implementation of decisions from the board.

Induction and training of new trustees

The charity undertakes training for trustees to ensure awareness and understanding of:-

- the responsibilities of directors;

- the organisational structure of the charity;

- the financial position of the charity; and

- the future plans and objectives of the charity.

Wider network

The charity has established links with other organisations and agencies to foster the aims and objectives of the organisation, including membership of Community Land Scotland and Development Trusts Association Scotland

Related parties

In January 2010 the charity set up a wholly owned subsidiary company, West Harris Renewables Limited, to develop community-owned renewable energy projects.

Pairc Niseaboist Power Limited was establised in June 2016 to supply electricity to local houses. The company is a wholly owned subsidiary of the charity.

Full details of the charity's subsidiary are included in the notes to the financial statements.

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 have assessed the major risks to which the charity is exposed, in particular those relating to the operations and finances of the charity, and are satisfied that systems are in place to mitigate their exposure to the major risks.

REFERENCE AND ADMINISTRATIVE DETAILS

Registered Company number

SC347176 (Scotland)

Registered Charity number

041920

Registered office

Talla na Mara

Pairc Niseaboist

Horgabost

Isle of Harris

HS3 3AE

Trustees

M Mackay

F Maclennan

N Campbell

R Macdonald

R Maclennan

R Macdonald

N I Mackay

N Macdonald

D Ferguson

G Macleod

D Calvert

Company Secretary

N Campbell

Independent Examiner

Calum MacDonald

Chartered Accountants/ICAS

CIB Services

Chartered Accountants

63 Kenneth Street

Stornoway

Isle of Lewis

Western Isles

HS1 2DS

Bankers

Bank of Scotland

Tarbert

Isle of Harris

HS3 3DJ

Solicitors

Anderson Macarthur

Old Bank of Scotland Buildings

Stornoway

Isle of Lewis

HS1 2BG

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 21 September 2021 and signed on its behalf by:

N Campbell - Trustee

I report on the accounts for the year ended 31 December 2020 set out on pages six to nineteen.

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. 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.

Calum MacDonald

Chartered Accountants/ICAS

CIB Services

Chartered Accountants

63 Kenneth Street

Stornoway

Isle of Lewis

Western Isles

HS1 2DS

21 September 2021

31.12.20

31.12.19

Unrestricted

Restricted

Total

Total

funds

funds

funds

funds

Notes

£

£

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

2

894

-

894

11,901

Charitable activities

4

Charitable activities

262,281

51,954

314,235

286,496

Investment income

3

105

-

105

481

Total

263,280

51,954

315,234

298,878

EXPENDITURE ON

Raising funds

5

-

-

-

100

Charitable activities

6

Charitable activities

184,338

124,675

309,013

341,489

Total

184,338

124,675

309,013

341,589

NET INCOME/(EXPENDITURE)

78,942

(72,721

)

6,221

(42,711

)

RECONCILIATION OF FUNDS

Total funds brought forward

232,648

2,143,302

2,375,950

2,418,661

TOTAL FUNDS CARRIED FORWARD

311,590

2,070,581

2,382,171

2,375,950

31.12.20

31.12.19

Notes

£

£

FIXED ASSETS

Tangible assets

13

2,077,628

2,101,829

Investments

14

102

102

2,077,730

2,101,931

CURRENT ASSETS

Debtors: amounts falling due within one year

15

82,179

69,477

Debtors: amounts falling due after more than one year

15

68,894

66,977

Cash at bank and in hand

198,726

164,702

349,799

301,156

CREDITORS

Amounts falling due within one year

16

(39,317

)

(18,457

)

NET CURRENT ASSETS

310,482

282,699

TOTAL ASSETS LESS CURRENT LIABILITIES

2,388,212

2,384,630

CREDITORS

Amounts falling due after more than one year

17

(6,041

)

(8,680

)

NET ASSETS

2,382,171

2,375,950

FUNDS

20

Unrestricted funds

311,589

232,648

Restricted funds

2,070,582

2,143,302

TOTAL FUNDS

2,382,171

2,375,950

The charitable company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 December 2020.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 December 2020 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.

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 21 September 2021 and were signed on its behalf by:

M Mackay - Trustee

N Campbell - Trustee

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.

The financial statements are prepared in sterling which is the functional currency of the charity.

The trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern. The trustees also consider that there are no significant areas of judgements, estimates or key assumptions that affect items in the accounts.

Preparation of consolidated financial statements

The financial statements contain information about The West Harris Trust as an individual charity and do not contain consolidated financial information as the parent of a group.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the income, there is sufficient certainty of receipt and so it is probable that the income will be received, and the amount of income receivable can be measured reliably. Income received in advance is deferred until the criteria for income recognition are met.

Grants generated to support the objects of the charity and without further specified purpose are taken to the Statement of Financial Activities in that period. Grants received which are related to capital expenditure or are for a specified purpose are transferred to Restricted Funds and are utilised to fund the future depreciation of the related capital expenditure or fund the costs relating to the specified purpose.

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. Expenditure includes any VAT which cannot be fully recovered, and is reported as part of the expenditure to which it relates.

Raising funds

Costs of generating funds comprise the costs associated with attracting voluntary income and the costs of fundraising activities.

Charitable activities

Charitable expenditure comprises those costs incurred by the charity in the delivery of its objects and activities. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them. The allocation of direct and support costs are analysed in the notes to the financial statements.

Governance costs

Governance costs include those costs associated with meeting the constitutional and statutory requirements of the charity and include accountancy fees and costs linked to the strategic management of the charity.

Allocation and apportionment of costs

All costs are allocated between the expenditure categories of the Statement of Financial Activities on a basis designed to reflect the use of the resource. Costs relating to a particular activity are allocated directly, others are apportioned on an appropriate basis e.g. estimated usage.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Land

-

no depreciation on land

Estate improvements

-

10% on cost

Buildings

-

4% on cost and no depreciation-asset under construction

Plant and machinery

-

10% on cost

Office equipment

-

25% on cost

Tangible fixed assets are stated at cost less accumulated depreciation. The costs of minor additions or those costing below £100 are not capitalised.

Taxation

The charity is exempt from corporation tax on its charitable activities.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Designated funds are unrestricted funds earmarked by the trustees for particular purposes.

Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the financial statements.

Pension costs and other post-retirement benefits

The charitable company operates a defined contribution pension scheme. Contributions payable to the charitable company's pension scheme are charged to the Statement of Financial Activities in the period to which they relate.

Investments

Fixed asset investments in group undertakings are stated at cost less accumulated provision.

2.	DONATIONS AND LEGACIES

31.12.20

31.12.19

£

£

Donations

894

11,901

3.	INVESTMENT INCOME

31.12.20

31.12.19

£

£

Interest received

46

41

Interest received on loan

59

440

105

481

All investment income arises from assets held within the UK.

4.	INCOME FROM CHARITABLE ACTIVITIES

31.12.20

31.12.19

Activity

£

£

Rental income

Charitable activities

88,410

89,456

Wayleaves

Charitable activities

1,637

-

Administration fees

Charitable activities

500

2,500

Land sales

Charitable activities

63,606

96,350

Grants

Charitable activities

88,554

36,531

Fundraising

Charitable activities

20,234

13,464

Management charges

Charitable activities

4,406

8,625

Events Income

Charitable activities

-

9,510

Share of running costs

Charitable activities

16,826

17,913

Coronavirus Job Retention Scheme

Charitable activities

17,687

-

Employment Allowance

Charitable activities

3,759

3,000

Other income

Charitable activities

8,616

9,147

314,235

286,496

Grants received, included in the above, are as follows:

31.12.20

31.12.19

£

£

Highlands and Islands Enterprise

4,377

12,425

Comhairle nan Eilean Siar

50,898

-

Big Lottery Fund

-

3,106

The Scottish Government

-

10,000

National Heritage Fund

(3,321

)

10,000

Tesco - Groundworks

-

1,000

Comhairle nan Eilean Siar - Business Support Grant

25,000

-

Crown Estate

11,600

-

88,554

36,531

5.	RAISING FUNDS

Raising donations and legacies

31.12.20

31.12.19

£

£

Fundraising expenses

-

100

6.	CHARITABLE ACTIVITIES COSTS

Direct

Support

Costs (see

costs (see

note 7)

note 8)

Totals

£

£

£

Charitable activities

246,097

62,916

309,013

7.	DIRECT COSTS OF CHARITABLE ACTIVITIES

31.12.20

31.12.19

£

£

Staff costs

91,004

98,552

Caretaker fees

-

1,125

Events

13,494

11,264

Repairs and renewals

9,840

30,851

Legal and professional fees

12,917

18,557

Licences

-

70

Donations

1,285

-

Depreciation

117,557

115,644

246,097

276,063

8.	SUPPORT COSTS

Governance

Premises

Administration

costs

Totals

£

£

£

£

Charitable activities

38,990

22,726

1,200

62,916

Support costs, included in the above, are as follows:

31.12.20

31.12.19

Charitable

Total

activities

activities

£

£

Light and heat

29,807

25,278

Telephone

3,208

2,430

Rates and water

3,206

5,886

Cleaning

2,769

2,975

Rent

8,944

5,233

Insurance

6,535

6,234

Travel expenses

667

1,372

Training and conferences

336

660

Postage and stationery

2,982

2,037

Advertising

410

6,581

Memberships and subscriptions

819

1,048

Sundry expenses

95

2,464

Finance costs

1,938

1,828

Accountancy and legal fees

1,200

1,400

62,916

65,426

9.	NET INCOME/(EXPENDITURE)

Net income/(expenditure) is stated after charging/(crediting):

31.12.20

31.12.19

£

£

Depreciation - owned assets

117,558

115,646

10.	TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 December 2020 nor for the year ended 31 December 2019.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31 December 2020 nor for the year ended 31 December 2019.

11.	STAFF COSTS

The average monthly number of employees during the year was as follows:

31.12.20

31.12.19

Trust activities

4

6

No employees received emoluments in excess of £60,000.

12.	COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

Unrestricted

Restricted

Total

funds

funds

funds

£

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

11,901

-

11,901

Charitable activities

Charitable activities

253,071

33,425

286,496

Investment income

481

-

481

Total

265,453

33,425

298,878

EXPENDITURE ON

Raising funds

100

-

100

Charitable activities

Charitable activities

198,750

142,739

341,489

Total

198,850

142,739

341,589

NET INCOME/(EXPENDITURE)

66,603

(109,314

)

(42,711

)

RECONCILIATION OF FUNDS

Total funds brought forward

166,046

2,252,615

2,418,661

TOTAL FUNDS CARRIED FORWARD

232,649

2,143,301

2,375,950

13.	TANGIBLE FIXED ASSETS

Estate

Land

improvements

Buildings

£

£

£

COST

At 1 January 2020

96,500

34,417

2,115,031

Additions

-

81,027

6,600

At 31 December 2020

96,500

115,444

2,121,631

DEPRECIATION

At 1 January 2020

-

19,340

214,765

Charge for year

-

3,308

85,641

At 31 December 2020

-

22,648

300,406

NET BOOK VALUE

At 31 December 2020

96,500

92,796

1,821,225

At 31 December 2019

96,500

15,077

1,900,266

Fixtures

Plant and

and

Office

machinery

fittings

equipment

Totals

£

£

£

£

COST

At 1 January 2020

79,740

89,625

13,127

2,428,440

Additions

-

5,000

730

93,357

At 31 December 2020

79,740

94,625

13,857

2,521,797

DEPRECIATION

At 1 January 2020

39,122

43,319

10,065

326,611

Charge for year

8,851

18,259

1,499

117,558

At 31 December 2020

47,973

61,578

11,564

444,169

NET BOOK VALUE

At 31 December 2020

31,767

33,047

2,293

2,077,628

At 31 December 2019

40,618

46,306

3,062

2,101,829