Isle of Eigg Heritage Trust - Charities report - 21.2

REGISTERED COMPANY NUMBER: SC170339 (Scotland)

REGISTERED CHARITY NUMBER: SC025609

REPORT OF THE TRUSTEES AND

UNAUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2021

FOR

ISLE OF EIGG HERITAGE TRUST

Page

Report of the Trustees

1

to

5

Independent Examiner's Report

6

Statement of Financial Activities

7

Balance Sheet

8

to

9

Notes to the Financial Statements

10

to

20

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 March 2021. 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 objects of the charity in the year under review were those of conservation of the natural heritage of the Isle of Eigg; promotion of sustainable development on the island; relief of poverty; provision of special needs housing and development of communications infrastructure.

Significant activities

IEHT and its 3 trading subsidiaries Eigg Trading Limited (which operates An Laimhrig which is leased to various local businesses), Eigg Electric Limited (which operates and manages the island wide electricity scheme) and Eigg Construction Limited (which undertakes a small amount of construction and maintenance work on the island) continue to work to grow the population and to improve the quality of life for residents.

ACHIEVEMENT AND PERFORMANCE

Charitable activities

During the year we secured the majority of the funding for our key An Laimhrig development. We were pleased to be working with Fiona Begg and WTA Architects to design the project in 2 separate phases. The first phase started in Spring 2021, after many delays due to COVID. The original An Laimhrig was the Trust's first major development following the buyout and it is exciting to see its replacement, required as the population and visitor numbers have grown, to be hopefully completed by our 25th anniversary of ownership.

The Trust and Trading Company are very lucky to have such an inspiring and collaborative team working on the Project; led by our Development Manager, Becca Long, Fiona Begg, WTA and Compass to who great thanks must be given for their support. We have all been working on routes to ensure as much local labour and materials can be utilised in the project as part of the development of Eigg's circular economy.

An important part of the An Laimhrig development is the creation of an interpretation strategy for the whole island, with Phase 1 the initial installations in the new build. We have enjoyed working with Elaine Clark and her team on the delivery of this.

Affordable housing on Eigg, like so much of rural Scotland is hugely constrained. 10% of our population is still in very unsuitable temporary accommodation. During the year we worked with NHS Highland to acquire the redundant GP surgery and have since created a scheme to develop 2 detached houses for our residents. Many thanks to the staff at NHS Highland who helped smooth the process and we look forward to inviting them to the opening of the houses once built.

The Tree Nursery is also developing well. We were pleased to welcome Tasha Fyffe as a permanent employee of the IEHT Team as Tree Nursery Manager. Thanks to all the volunteers who have helped Tasha with the planting and seed nursery project and thanks to the Woodland Trust for their invaluable support throughout the year.

As with many small communities, COVID had a huge impact on Eigg, which was completely closed to visitors during the period. This had a really significant impact on residents, the community and businesses. As across Scotland, the community came together to support Eigg's most vulnerable residents through the crisis. Again, a big thank you to everyone who helped, and continues to help with this and much appreciation to our funders for their flexibility and support. As a community we certainly expect to feel the ongoing effects of COVID for some time to come.

During the year we also acquired the Highland Council pier, and have started work on how we can develop this important asset to generate income and provide better services for our visitors.

Eigg Electric continues to develop the system for the benefit of the community. It continues to run at a very tight capacity. This is not an issue when the hydro is working. However, a dry summer meant we had no hydro, and was partially dependent on diesel for a period. Thanks to everyone who helped out in all sorts of ways. We have received CARES funding to instal 120kW of new solar panels which will certainly mitigate these impacts should we have another dry period.

We are also working with Local Energy Scotland on a heat demonstration project which will be trialled in the 2 new surgery houses.

We have made new connections to the Hub development and the Brewery. Thank you to everyone who gave time to ensure the Hub connection costs were kept to a minimum. A number of residents are waiting for connections/upgrades, which we will be in a position to complete when the new panels are connected.

In the EE Team, after many years of support, Jenny retired this year and we thank her for her service. We recruited new team members Gabe and Ed but unfortunately Ed has since had to resign. As always thanks to Bob, Neil, Ben, Greg and Gabe, for their time and commitment which ensures that the system is maintained at a level to support the island, especially on the rare occasions we have an outage.

Overall COVID has meant a very difficult year for Eigg and the Trust. However, we continued to provide the full range of services and to move key projects forward. This would not have been possible without the help of a great staff and Board team and our many funders, especially Scottish Government and Alaistar Nicolson at Highlands and Islands Enterprise.

Internal and external factors

The charity is partially dependent upon the continuing support of public funding agencies to assist in the ongoing delivery of the aims and objectives of the organisation.

FINANCIAL REVIEW

Financial position

The financial statements for the year ended 31 March 2021 record that incoming resources exceeded resources expended by £32,834 (2020 - £96,285 deficit) and funds total £2,319,950 (2020 - £2,287,116). The expenditure includes depreciation of £24,155 which is funded by capital grants received in earlier years.

Principal funding sources

The trust is structured to ensure that the recurring income streams are sufficient to meet the annual operating expenses. Major development projects are only undertaken when full funding is secured.

Investment policy and objectives

The charity's funds are held on deposit in bank accounts.

Reserves policy

IEHT use the following definitions for funds held:

Restricted Funds - funds held by the charity which can only be used for a specified purpose. This restriction is generally placed by the donor or grant-giver and can only be lifted with the donor's permission, or when the restrictions placed on the funds have been lifted.

Risk reserves - funds designated by the charity to protect the organisation from unexpected variations in income, expenditure or balance sheet assets, thereby ensuring the ability to maintain the operation of the organisation at existing levels.

Designated funds - funds held by the charity for which the Board have chosen to formally designate for a specific purpose. The Board can choose to re-designate these funds if circumstances change.

Free reserves - the balance of funds held by the charity after deducting restricted funds, risk reserve and designated funds and so can be used for any purpose at any time.

The current position of the Trustees on the Reserves are as follows:

Restricted Funds

IEHT hold a range of restricted funds relating to public sector grants to deliver predominantly short term projects. Other restricted funds noted in the accounts relate to the value of the capital assets of the island and its infrastructure and also funds received from the Big Green Challenge award which are to be used for greening and environmental projects in line with community aspirations for this Award.

The main components of restricted funds as of the accounts at March 2021 are held in Fixed Assets, £2,043,285, and Big Green Challenge, £102,668.

Risk Reserve

IEHT Board have determined that the value of this fund is to be built up to cover up to 6 months of normal operation of the organisation which would amount to £40,000.

Designated Funds

This could include match funding to leverage grant funding for specific projects. At this time there are no designated funds.

Free Reserves

At this time IEHT does not have any free reserves.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The charity is controlled by its governing document, a deed of trust, and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.

The trust is a charitable company limited by guarantee, incorporated on 28 November 1996 and registered as a charity on 23 December 1996 (Scottish Charity number is SC025609). 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 and are appointed by the members in accordance with the Memorandum and Articles of Association. The members are Isle of Eigg Residents Association, Highland Council and Scottish Wildlife Trust.

Organisational structure

The board consists of voluntary trustees who manage the affairs of the charity through regular board meetings where matters are discussed and agreed. The decisions taken by the board are implemented by the Administrator who manages the day to day running of the Trust.

Induction and training of new trustees

The charity undertakes training for trustees to ensure awareness of the responsibilities of trustees, the organisational structure of the charity, understanding of the financial position of the charity and future plans and objectives.

Related parties

The charity has three wholly-owned trading subsidiaries: Eigg Trading Limited, Eigg Construction Limited and Eigg Electric Limited.

REFERENCE AND ADMINISTRATIVE DETAILS

Registered Company number

SC170339 (Scotland)

Registered Charity number

SC025609

Registered office

An Laimhrig

Isle of Eigg

PH42 4RL

Trustees

M Foxwell (resigned 6.8.21)

D Helliwell (resigned 1.7.20)

L Conway

J Thompson

N Barnes

E A Boden (resigned 1.7.20)

A Raeburn

G Carr (appointed 1.7.20)

S J Hollands (appointed 1.7.20)

Ms C L Dressler (appointed 10.7.21)

Ms M Henley (appointed 8.8.21)

Company Secretary

M Fyffe

Independent Examiner

CIB Services

Chartered Accountants

63 Kenneth Street

Stornoway

Isle of Lewis

Western Isles

HS1 2DS

Bankers

Bank of Scotland

62 High Street

Fort William

Inverness-shire

PH33 6AE

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 30 November 2021 and signed on its behalf by:

M Fyffe - Secretary

I report on the accounts for the year ended 31 March 2021 set out on pages seven to twenty.

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.

Calum Macdonald

CIB Services

Chartered Accountants

63 Kenneth Street

Stornoway

Isle of Lewis

Western Isles

HS1 2DS

30 November 2021

31.3.21

31.3.20

Unrestricted

Restricted

Total

Total

funds

funds

funds

funds

Notes

£

£

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

2

676

-

676

1,194

Charitable activities

5

Charity Activities

130,598

81,332

211,930

74,174

Other trading activities

3

140

-

140

4,148

Investment income

4

1,306

-

1,306

1,321

Total

132,720

81,332

214,052

80,837

EXPENDITURE ON

Raising funds

25

-

25

895

Charitable activities

6

Charity Activities

77,906

68,176

146,082

127,931

Total

77,931

68,176

146,107

128,826

Net gains/(losses) on investments

(3,064

)

(32,047

)

(35,111

)

(48,296

)

NET INCOME/(EXPENDITURE)

51,725

(18,891

)

32,834

(96,285

)

RECONCILIATION OF FUNDS

Total funds brought forward

117,762

2,169,354

2,287,116

2,383,401

TOTAL FUNDS CARRIED FORWARD

169,487

2,150,463

2,319,950

2,287,116

31.3.21

31.3.20

Unrestricted

Restricted

Total

Total

funds

funds

funds

funds

Notes

£

£

£

£

FIXED ASSETS

Tangible assets

13

6,328

1,683,022

1,689,350

1,670,467

Investments

14

51,508

168,101

219,609

254,720

57,836

1,851,123

1,908,959

1,925,187

CURRENT ASSETS

Debtors

15

60,989

214,792

275,781

270,059

Cash at bank and in hand

54,312

84,549

138,861

93,953

115,301

299,341

414,642

364,012

CREDITORS

Amounts falling due within one year

16

(3,650

)

(1

)

(3,651

)

(2,083

)

NET CURRENT ASSETS

111,651

299,340

410,991

361,929

TOTAL ASSETS LESS CURRENT LIABILITIES

169,487

2,150,463

2,319,950

2,287,116

NET ASSETS

169,487

2,150,463

2,319,950

2,287,116

FUNDS

18

Unrestricted funds:

General fund

65,229

10,440

Investment in Subsidiaries

104,258

107,322

169,487

117,762

Restricted funds

2,150,463

2,169,354

TOTAL FUNDS

2,319,950

2,287,116

The charitable company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 March 2021.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 March 2021 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 30 November 2021 and were signed on its behalf by:

L Conway - 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.

Financial reporting standard 102 - reduced disclosure exemptions

The charitable company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland':

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Isle of Eigg Heritage Trust as an individual company and do not contain consolidated financial information as the parent of a group. The charity is exempt under Section 399(2A) of the Companies Act 2006 from the requirements to prepare consolidated financial statements.

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.

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.

Raising funds

Charitable expenditure comprises those costs incurred by the charity in the delivery of activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.

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 audit 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.

Tangible fixed assets

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

Freehold property

-

no depreciation on land

Long leasehold

-

4% on cost

Plant and machinery

-

25% on cost and 10% on cost

Computer 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.

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.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to the Statement of Financial Activities on a straight line basis over the period of the lease.

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

31.3.21

31.3.20

£

£

Donations

676

1,194

3.	OTHER TRADING ACTIVITIES

31.3.21

31.3.20

£

£

Merchandise

-

1,203

Sale of logs

140

2,945

140

4,148

4.	INVESTMENT INCOME

31.3.21

31.3.20

£

£

Interest on loan to subsidiary

1,275

1,275

Deposit account interest

31

46

1,306

1,321

5.	INCOME FROM CHARITABLE ACTIVITIES

31.3.21

31.3.20

Activity

£

£

Rental income

Charity Activities

36,660

36,061

Grants

Charity Activities

167,555

27,728

Other income

Charity Activities

3,947

7,385

Employment allowance

Charity Activities

3,768

3,000

211,930

74,174

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

31.3.21

31.3.20

£

£

Forestry Commission

31,536

-

Highland Council

17,500

-

Highlands & Islands Enterprise

94,332

26,603

Scottish Government

-

1,125

Corra Foundation

21,528

-

Scottish Land Fund

2,659

-

167,555

27,728

6.	CHARITABLE ACTIVITIES COSTS

Direct

Support

Costs (see

costs (see

note 7)

note 8)

Totals

£

£

£

Charity Activities

142,370

3,712

146,082

7.	DIRECT COSTS OF CHARITABLE ACTIVITIES

31.3.21

31.3.20

£

£

Staff costs

62,913

61,102

Land Management

-

262

Insurance

8,114

7,332

Light and heat

683

1,370

Telephone

415

370

Office expenses

3,102

1,141

Repairs and maintenance

7,311

13,896

Website development costs

-

126

Consultancy fees

5,400

8,578

Donations

-

2,500

Training

-

190

Planting costs

11,928

-

COVID-19 Response

18,389

-

Depreciation

24,115

25,154

142,370

122,021

8.	SUPPORT COSTS

Governance

Management

Finance

Other

costs

Totals

£

£

£

£

£

Charity Activities

1,560

80

962

1,110

3,712

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

31.3.21

31.3.20

Charity

Total

Activities

activities

£

£

Rent

1,512

1,512

Motor and travel

48

2,432

Bank charges

80

78

General charges

962

808

Accountancy fees

1,110

1,080

3,712

5,910

9.	NET INCOME/(EXPENDITURE)

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

31.3.21

31.3.20

£

£

Depreciation - owned assets

24,115

25,155

Other operating leases

1,512

1,512

10.	TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 March 2021 nor for the year ended 31 March 2020.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31 March 2021 nor for the year ended 31 March 2020.

11.	STAFF COSTS

31.3.21

31.3.20

£

£

Wages and salaries

58,261

56,544

Social security costs

3,768

3,822

Other pension costs

884

736

62,913

61,102

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

31.3.21

31.3.20

Charity activities

3

3

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

1,194

-

1,194

Charitable activities

Charity Activities

46,446

27,728

74,174

Other trading activities

4,148

-

4,148

Investment income

1,321

-

1,321

Total

53,109

27,728

80,837

EXPENDITURE ON

Raising funds

895

-

895

Charitable activities

Charity Activities

56,877

71,054

127,931

Total

57,772

71,054

128,826

Net gains/(losses) on investments

(433

)

(47,863

)

(48,296

)

NET INCOME/(EXPENDITURE)

(5,096

)

(91,189

)

(96,285

)