ARDGOWAN_HOSPICE_LIMITED - Accounts

I present this report at the end of a year of continuing challenge and evolution in the life of Ardgowan Hospice, but one in which the commitment, dedication and professionalism of our staff and volunteers to the excellent care and support of patients, families, and the charity itself have continued unabated.

There has been significant change and addition within the Trustees group in 2022/23, with Mark Brown initially taking a six-month leave of absence from direct involvement in his role from the early Autumn to making the decision to step down permanently in February 2023. Mark had been one of the longest serving members of the Board, and his contribution and commitment to Ardgowan were hugely appreciated and it is important to put on record my thanks to him on behalf of Ardgowan. He has been replaced as Chair of our Finance, Resources and Risk Committee by Peter Bennett. We had a significant influx of new trustees over the year, with Pauline McAlpine, Marco Rebecchi, Trudi Marshall, and Gillian Maxwell all coming on board with a range of clinical, business, and community experience.

From the outset of my role as Chair, I have been clear that there was a need for an increase in the number of trustees on the Board to ensure effective and robust governance arrangements in the Charity to support the CEO and his team in delivering the service. It is pleasing and welcome that so many individuals, particularly from within Inverclyde, wish to devote their time voluntarily to the important work of trusteeship of one the community’s largest charities. As the financial year closes, there remains a need for some further trustee recruitment in 2023/24, and plans are in place regarding this.

This has been the first full year in post of our CEO, Graham Gardiner, and he has brought a wealth of experience and a different approach that has focussed on changing the culture and position of Ardgowan as an anchor institution within Inverclyde. There has been a significant evolution of our ‘offer’ to Inverclyde’s population and stakeholder partners from within Ardgowan, which has seen us begin the journey of fulfilling our collective ambition to be the sector leader in the provision of palliative and end-of-life care across Scotland.

Graham commenced the necessary activity of evaluating the current status and place of the charity with a view to developing a draft strategic plan for the Board to consider and approve in early 2023/24 for the period 2023-2028. This activity has involved significant levels of engagement with patients and their families, the charity’s workforce, and external stakeholders. Graham has utilised a full range of networking skills throughout his first year to establish key relationships with multiple statutory and voluntary sector providers across Inverclyde, many other fellow CEOs of Scottish hospices, and, importantly with Hospice UK and the Scottish Government. Evidence of the positive impact of this activity is the agreement by all parties involved that Graham should chair the multi-stakeholder development of an Inverclyde palliative and end of life care strategy.

Towards the year ending March 2022, we received resignations from our Head of Finance and Head of Fundraising, two key senior management team members. We embarked on an interim arrangement in the former position, the end point of which was an open recruitment culminating in the appointment of Fiona Conway as our new Head of Finance. Fiona came to us with a considerable level of senior and academic experience in financial management and very quickly settled into role, updating and modernising many of our systems to ensure continuing efficient and effective processes and financial governance. Likewise, in relation to fundraising, Elaine Grealey was appointed to the Head of Service role in the Summer 2022 and has also brought new energy and vision to the demands this role brings.

Continuing on the theme of senior management change, our Director of Care, Frances Downer, declared her intention to retire towards the end of the financial year and has been replaced on an interim basis by Hazel Gavin, acting up from her role as Nursing Services Manager. Ardgowan is incredibly grateful to Frances for her service and clinical leadership, particularly through the height of the pandemic.

Finally, in respect of our senior team, we were delighted that Dr Holly McGuigan was successful at the beginning of 2023 in achieving Consultant status, and this has enabled us to review with NHS GGC, Accord and St Vincent hospices, the South Clyde on-call and consultant support arrangements that have been in a position of relative hiatus over the past three or four years. Professor Rob George and Dr Emma Hall continued to provide their virtual consultation to the specialty doctors and Advanced Nurse Practitioners who came in to post in the summer of 2022, and we are grateful to them for this. The impact of these changes to specialty doctor, consultant and stakeholder relationships over the past year has seen a dramatic upturn in the usage of inpatient beds and occupancy levels have been maintained at an optimum 85% since late 2022.

Our Community Nursing Team and their provision have also been under review through this year, intending to seek to have greater coverage and a bigger impact on individuals' and families' lives, and we are proud to have provided a care and support service to a total of 850 patients and families across all our services across Inverclyde over the whole year.

In other aspects of our clinical provision, discussions on the place for Compassionate Inverclyde and how this important service continues to evolve and develop have been led by our CEO and we expect clarity and direction to be established early in 2023/24. This connects with the work Graham has been undertaking also in partnership with the Health and Social Care Partnership on progressing a meaningful Service Level Agreement with our commissioning Integration Joint Board including robust key performance indicators for effective monitoring and impact.

Our fundraising efforts over the past year have continued to do well except for outcomes to applications for grants and trusts, which did not produce the returns anticipated. This is an area that our fundraising team will be focussing on in the next financial year, as well as putting in place new annual bespoke fundraising events such as 12 Days to Kiltmas. Our annual Ball in March continues to be a hugely well supported event in Greenock, with it being sold out very quickly and we are grateful to the sponsorship that we receive from local businesses, enabling the event to be so successful.

Ardgowan Hospice has benefitted yet again this year from the overwhelming generosity of people across Inverclyde who have felt the benefit of the services we provide to such an extent that they have made bequests from their estate to the charity on their passing. We continue not to budget expenditure against an unknown level of income, but such generosity does enable us to ensure both the financial wellbeing of the charity and undertake bespoke and necessary responses to extenuating circumstances that have the potential to negatively impact on the overall wellbeing of the service. An example of this was the Board’s response to the cost-of-living crisis that swept across the UK in 2022. The Board sanctioned a proposal from the CEO at the end of 2022 to make a (£500) one-off payment to every member of staff in January (pro rata for part-time staff), and over the winter months, make available a breakfast and soup lunch to all our staff. This proved hugely successful, with a 95% take-up and was an important organisational response to a pressing need in our community. It could not have happened without the continuing legacy gifting that we receive.

I am pleased to report that we were able to finish the financial year in a strong position due to the receipt of further and final grant allocations from the Ardgowan Hospice Deed of Trust (which was subsequently wound up in early 2023) and non-budgeted legacy receipt.

Ardgowan has a hugely important place in the life of Inverclyde and its population. The support and contribution of so many volunteers, staff, patrons and donors in ensuring a continuing vibrancy, sensitivity, innovation and responsiveness to the needs of individuals with palliative and end-of-life needs, and their families is second to none in my experience. My sincere thanks to all for their contribution.

David Williams

The Trustees of Ardgowan Hospice, who are also Directors of Ardgowan Hospice for the purposes of the Companies Act 2006, are pleased to present their annual report and audited financial statements for the year ended 31 March 2023.

The financial statements comply with the Charities and Trustees Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), the Companies Act, the Memorandum and Articles of Association, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard application in the UK and Republic of Ireland.

Compassion - "at the heart of compassions is kindness"

Appreciation - "encourage & help each other achieve our goals"

Respect - "we value each person as an individual"

Equality - "make sure nobody is excluded or left behind"

The mission of Ardgowan Hospice has remained unchanged over its 42 year history, it is that:

"Ardgowan Hospice, supported by local community, aims to provide the highest quality care for patients ad families living with a life limiting illness. The Hospice values quality of life, dignity, privacy and individual choice."

Set withing the diverse demographics of Inverclyde where areas of significant poverty and deprivation border areas of significant affluence, Ardgowan Hospice has four charitable purposes which it seeks to achieve through a range of activities, delivered by a multi-disciplinary group of staff and volunteers, these are:

1. To promote the relief of suffering by caring and supporting:

• patients and families living with a life limiting illness;

• people with any chronic or terminal illness;

• people with any disability or disease attributable to old age; and

• people with any other physical or mental infirmity, disability or disease.

2. To conduct, promote or encourage research into the care and treatment of people suffering from any such illness, disability, disease or infirmity, particularly into the care and treatment of people suffering from cancer or terminal illnesses.

3. To promote, encourage or assist in the teaching or training of healthcare professionals and students.

4. To provide, assist or encourage the provision of spiritual help and guidance for people attending the hospice or working there.

Our mission and charitable purposes give rise to our vision which drives all the work we do, it is to provide:

"Access to the best possible care and support for everyone living with a life limiting illness."

The Trustees have paid due regard to guidance issued by OSCR in deciding what activities the charity should undertake.

Overall, the income derived from various sources, see bullet points below, analysed over the various individual activities as follows:

• Income from grants and donations fell by 55.5% to £515,384 (2022: £1,157,910)

• Legacy income rose by 375.5% to £829,084 (2022: £174,356)

• Fundraising income fell by 3.5% to £281,776 (2022: £291,977)

• Income from the Lottery fell by 7.0% to £306,992 (2022: £330,253)

• Retail income rose by 16.3% to £330,519 (2022: £284,147)

Ardgowan Hospice has a reserves policy, which considering the unpredictability of legacy income, is designed to maintain a buffer against unforeseen reductions in income and enable the Hospice to respond to unexpected opportunities for service development.

The Hospice's reserves policy is to maintain the level of reserves at a level equal to at least six months operating costs. The Trustees regularly review the hospice's reserves level. At current levels of operational expenditure, the target level of reserves would be £1,686,470

The method of calculating our reserves was changed during 2016/17 to exclude fixed assets, designated funds, and restricted reserves, to focus on free funds, which is generally accepted to be a more appropriate calculation of the funding available in the organisation in an emergency.

On 31 March 2023, the level of free funds was £619,243. The level of free funds on 31 March 2022, calculated on the same basis, was £594,414.

Whilst this level of free funds is below the target in the reserves policy, the Board accept that the current position is a result of several years of operating at a deficit. The Board have approved a long-term recovery plan which will see the hospice operate within existing free funds levels whilst reversing the deficit, with a return to a surplus position enabling us to start to rebuild the level of free funds.

The Hospice is partly funded by a contribution from Inverclyde Health and Social Care Partnership (HSPC) based on an NHS Service Level Agreement (SLA). The HSPC funding does not cover capital expenditure. For the year 1 April 2022 to 31 March 2023, the HSPC provided funding of £1,514,470; for the previous financial year 2021/22, HSPC funding was £1,524,036) a 0.6% decrease on the previous year.

The remainder of the funds required to provide the Hospice services, is raised through legacies, donations, gifts and grants, fundraising, retail shops, the Lottery and the Friends if Ardgowan Hospice.

The Charity's key objective is to provide high quality, specialist, palliative care to patients and carers. All expenditure is either directly related to this objective, relates to an activity required to support this objective, or is an investment in fundraising activities to generate additional funds, which will in turn be used to further the objectives of the organisation.

During 2016/17, the Board agreed to a change in investment policy, moving all investments from a medium risk level to a low risk profile. Whilst recognising that this would reduce the income from the investments, this was considered to be acceptable in order to achieve greatly reduced volatility in the value of the portfolio. In February 2020 the Board reaffirmed this strategy which with the emerging Coronavirus situation, proved to be remarkably prudent, as within weeks the virus was categorised as a pandemic (March 2020). The Board regularly reviews this strategy under the authority delegated to the Hospice Finances, Resources and Risk Board Sub Committee.

The primary objective of the Charity's current investment approach is a balance of capital and income growth. As permitted by the Charity's Articles of Association, the Trustees have appointed Investment Managers (Rathbones) and given them discretion to manage the portfolio within an agreed profile of low risk. Rathbones act as the hospice custodian and any uninvested cash is held in a segregated bank account. It is the Charity's policy not to invest directly in tobacco companies.

The Investment Manager attends the Finance, Resources and Risk Board Sub Committee, as required, to report on investment performance.

The Trustees has assessed the major risks to which the charity is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.

These accounts have been prepared on a going concern basis. In 2022/23, the hospice ended the year in surplus and this despite the challenges initiated by the pandemic. This is in part due to the revisions that have been made to the staffing structure. Additionally, going forward, the Board has decided that legacy income will not be included within the annual budget setting process and that expenditure should be set at a level without recourse to legacy income due to the difficulty of predicting this income in advance. Legacy income will instead be used to strengthen the free reserves of the hospice until they reach the levels required by our reserves policy. The current economic environment remains uncertain, but the Trustees are of the opinion that the reserves, bank facilities and investments held, together with the organisational efficiencies, will together ensure financial stability in the long-term. The Board and Management are focused on this requirement and regularly review costs and income so that early intervention is applied when required.

Ardgowan Hospice Limited is a charitable company limited by guarantee, incorporated on 13 July 1981. It is registered as a Scottish charity with the Office of the Scottish Charity Regulator (OSCR).

Ardgowan Hospice is governed by its Articles of Association, which define its sphere of activity and form its constitution. The Articles were reviewed in 2010 to ensure full compliance with the Companies Act 2006 and the revised constitution was approved at the Annual General Meeting in October 2010.

Ardgowan Hospice is a membership organisation and the criteria for membership are defined in the Articles of Association. The company does not have share capital but is limited by guarantee. On 31 March 2023 the company had 26 members, each of whom agrees to a liability limited to £1 in the event of the charity winding up.

The Trustees (Directors) in office during the year ended 31 March 2023 were as follows:

The Board of Trustees, comprising members from a range of backgrounds and established under the Articles of Association, meet at least four times a year.

No outside party can appoint Trustees.

New Trustees are appointed as required to complement the skills and experience of serving Trustees.

A role description and statement of main responsibilities is used in the appointment of Trustees. A Code of Practice on Governance, prepared in accordance with the National Council for Voluntary Organisations (NCVO) - Charity Governance Code (13 July 2017 / refreshed December 2020 / further review pending), is available for guidance. All Trustees are provided with copies of these documents within induction packs.

All newly appointed Trustees are required to sign a Declaration of Interests statement which includes confirming that they are willing to act as a Trustee for the organisation; that they are fit to practice; and are asked to provide a background of their career history to date pre appointment.

All new Trustees undergo a period of induction, which includes time spent with the Chief Executive and key staff within the Hospice. An Ardgowan Hospice Trustee Induction Pack is circulated to each new Trustee and information within includes:

• Organisation Structure

• Articles of Association

• Board and Board Sub Committee Meeting Structure with relevant dates

• Vision, Mission and Key Values

• Report and Financial Statements for most recent year-end period

• Our Strategy

• Trustee Role Description

• Hyperlinks to useful websites for information / training

Attendance at relevant study days, seminars or conferences is discussed with Trustees as and when appropriate. We also host two Trustee I Senior Management Away Days in March and September every year.

The Board of Trustees is responsible for setting the strategic direction for the Hospice, against a governance framework, which is designed to ensure probity and transparency for the decision-making process. The Hospice's governance framework also recognises the delegation of functions to Sub Committees of the Board although it does not take away the Board's responsibility to take executive action across the range of its responsibilities. Standing Orders are in place for proceedings and business of the Board of Trustees and Board Sub Committees.

As at 31 March 2023, the Board of Trustees has established two Board Sub Committees, which meet four times a year, a further Sub Committee is pending:

• Finance, Resources and Risk

• Care, Governance and Performance

The Board has also established the following Board Sub Committee which meet as and when required:

• Trustees' Appointments Committee

Responsibility for the day-to-day running of the Charity rests with the Chief Executive, who reports to the Board of Trustees and is supported by the Senior Management Team (SMT). The SMT consists of senior managers whose remits cover the areas of Clinical Care, Income Generation, Human Resources and Finance and Operations.

A budget is set annually in advance and is submitted to the Board of Trustees for approval.

Listed below are details of key staff who were members of the SMT during the reporting period:

• Chief Executive - Graham Gardiner

• Director of Care - Frances Downer

• Head of Income Generation - Elaine Grealey

• Head of People and Culture - Rebecca Morrison

• Consultant in Palliative Medicine - Dr Holly McGuigann

Ardgowan Hospice Pay Scale is loosely related to the NHS Scotland Agenda for Change Pay and Grading System as the basis for setting the pay rate for all appointments. All roles are assessed to the appropriate banding of. the salary scale, but the specific spinal point awarded within that band will depend on the· appointee's skills and experience.

For Senior Management and other hard to fill roles there is scope for negotiation and it is recognised that for the purposes of recruitment and / or retention the Board of Trustees might, on occasion, consider increasing the salary of a member of the SMT, or all of the SMT.

The Trustees have overall responsibility for ensuring that the Hospice has assessed the major risks to which it is exposed and has a risk management strategy in place which comprises:

• The establishment of two Board Sub Committees which feed into the Board.

• The establishment of policies, systems and procedures to mitigate risks.

• The establishment of procedures designed to minimise or manage any potential impact on the hospice should risks materialise.

• Monitoring and review of the Strategic and Operational Risk Registers at the relevant Board Sub Committees and at the full meeting of the Board of Trustees on a quarterly basis.

It was agreed by the Board, that the necessity to operate a separate company for the sole purpose of operating a Lottery was not required and as such the operation of the Lottery was transferred back to the main company Ardgowan Hospice Limited. The former subsidiary, the Ardgowan Hospice Lottery Limited is now closed.

There are no related party issues and the company Ardgowan Hospice Limited operates as a single entity.

The Trustees, who are also the directors of Ardgowan Hospice 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 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 Consilium Audit 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 Ardgowan Hospice Limited (the ‘charity’) for the year ended 31 March 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the notes to the financial statements, including a summary of 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:

give a true and fair view of the state of the charitable company's affairs as at 31 March 2023 and of its incoming resources and application of resources, for the year then ended;

have been prepared in accordance with the requirements of the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

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 trustees' (who are also the directors of the company for company law purposes) 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 charitable company'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 Trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 (as amended) require us to report to you if, in our opinion:

the information given in the financial statements is inconsistent in any material respect with the Trustees' 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 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 report in accordance with the Act and relevant regulations made or having effect thereunder.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• We ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.

• We identified the laws and regulations applicable to the company through discussions with directors and management and from our knowledge of the regulatory environment relevant to the company.

• We assessed the extent of compliance with laws and regulations through making enquiries of management and inspecting legal correspondence.

• We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud.

• To address the risk of fraud through management bias and override of controls, we tested journal entries to identify unusual transactions, we assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias and we investigated the rationale behind significant or unusual transactions.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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 auditors' 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.

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The company is entitled to the exemption from the audit requirement contained in section 477 of the Companies Act 2006, for the year ended 31 March 2023, although an audit has been carried out under section 144 of the Charities Act 2011.

The Trustees acknowledge their responsibilities for ensuring that the charity keeps accounting records which comply with section 386 of the Act and for preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of the financial year and of its incoming resources and application of resources, including its income and expenditure, for the 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 company.

The members have not required the company to obtain an audit of its financial statements under the requirements of the Companies Act 2006, for the year in question in accordance with section 476.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

Ardgowan Hospice Limited is a private company limited by guarantee incorporated in Scotland. The registered office is 12 Nelson Street, Greenock, PA15 1TS, Scotland.

The financial statements have been prepared in accordance with the charity's Statement of Recommended Practice, 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 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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

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 income funds comprise those funds which the trustees are free to use for any purpose in furtherance of the charitable objects. Unrestricted funds include designated funds where the trustees, at their discretion, have created funds for specific purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by the donor or trust deed, or through the terms of an appeal.

Income is recognised once the charity has entitlement to the income, it is probable that the income will be received, and the amount of income receivable can be measured reliably.

Donations are recognised when the charity has been notified in writing of both the amount and the settlement date. In the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those condition is wholly within the control of the charity, and it is probable that those conditions will be fulfilled in the reporting period.

Legacy gifts are recognised on a case-by-case basis following the granting of probate when the administrator/executor for the estate has communicated in writing both the amount and settlement date. In the event that the gift is in the form of an asset other than cash, or a financial asset traded on a recognised stock exchange, recognition is subject to the value of the gift being reliably measurable with a degree of reasonable accuracy and the title to the asset having been transferred to the charity.

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 the grants have been met, it is probable that the income will be received, and the amount can be measured reliably and is not deferred.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank. Dividends are recognised once the dividend has been declared and notification has been received of the dividend due. This is normally upon notification by our investment advisor of the dividend yield of the investment portfolio.

Income received in advance of the provision of a specified service is deferred until the criteria for income recognition are met.

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 settlement will be required, and the amount of the obligation can be measured reliably.

All expenditure is accounted for on an accruals basis. All expenses including support costs and governance costs are allocated or apportioned to the applicable expenditure headings.

• Expenditure on charitable activities includes Specialist Palliative Care and other activities undertaken to further the purposes of the charity and their associated support costs;

• Raising funds - other trading activities including fundraising costs, shop costs and lottery costs;

• Investment management costs - costs associated with the management of the charity's investment portfolio

Irrecoverable VAT is charged as a cost against the activity for which the expenditure is incurred.

Allocation of support and governance costs

Support costs have been allocated between governance costs and other support costs. Governance costs comprise all costs involving the public accountability of the charity and its compliance with the regulation and good practice. These costs include costs related to statutory audit and legal fees together with an apportionment of overhead and support costs.

Governance costs and support costs relating to charitable activities have been apportioned based on time spent.

Donated services and facilities

Donated professional services and donated facilities are recognised as income when the charity has control over the item, any conditions associated with the donated item have been met, receipt of economic benefit from the use by the charity of the item is probable and that economic benefit can be measured reliably. In accordance with Charities SORP (FRS 102), general volunteer time is not recognised.

On receipt, donated professional services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.

All assets costing more than £500 are capitalised and are valued at historical cost.

Depreciation is provided on fixed assets for the purpose of writing off each asset over its estimated useful life at the following rates:

Investments are a form of basic financial instrument and are initially recognised ay their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The statement of financial activities includes the net gains and losses arising on revaluation and diposals throughout the year.

The charity does not acquire put options, derivatives or other complex financial instruments.

The main form of financial risk faced by the charity is that of volatility in equity markets and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities and within particular sectors or sub sectors.

Stock is included at the lower of cost or net realisable value.

Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

The company is a charitable company within the meaning of Section 467 of the Corporation Tax Act 2010. Accordingly, the company is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 of Part 11 of the Corporation Tax Act 2010 and section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied for charitable purposes only.

The costs of short-term employee benefits are recognised as a liability and an expense unless those costs are required to be recognised as art of the cost of stock or fixed assets.

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 charitable company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Pensions

A number of the hospice employees have opted to remain in the National Health Service Superannuation Scheme. This is a defined benefit scheme administered independently from the hospice. The contributions payable to the scheme are charged to the Statement of Financial Activities in respect of the relevant accounting period.

The hospice also operates a defined contribution scheme. Contributions payable for the year are charged to the Statement of Financial Activities, as they become payable in accordance with the rules of the Scheme.

The charity classifies the lease of properties as operating leases; the title to the properties remains with the lessor. Rental charges are charged on a straight-line basis over the term of the lease.

Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

Creditors and provisions

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably, Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

Realised gains and losses

All gains and losses are taken to the Statement of Financial Activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value.

In the application of the charity’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Fixed assets are depreciated over the useful life of assets. The useful life of fixed assets are based on the knowledge of senior management, with reference to the assets expected useful life.

Support costs are allocated between charitable activities and governance based on the time spent by senior management on undertaking the charity's activities.

Treasury Funding

Hospice services

Coronavirus Job Retention Scheme

Lottery costs

Fundraising

Charitable Activities

Charitable Activities

Other staff costs

Travel

IT costs

Office costs

Professional fees

Consultancy fees

Vehicle costs

Cleaning costs

Equipment

Supervision

Governance costs includes payments to the auditors of £10,750 (2022 - £11,495) for audit fees.

The average monthly number of employees during the year was:

All investments are carried at their fair value. Investment in equities and fixed interest securities are all traded in quoted public markets, primarily the London Stock Exchange. Holdings in common investment funds, unit trusts and open-ended investment companies are at the mid-price. The basis of fair value for quoted investments is equivalent to the market value, using the bid price. Asset sales and purchases are recognised at the date of trade at cost (that is their transaction value) The significance of financial instruments to the ongoing financial sustainability of the Charity is considered in the financial review and investment policy and performance sections of the Trustees' Report.

The main risk to the charity from the financial instruments lies in the combination of uncertain investment markets and volatility yield. In terms of specific risks including foreign exchange and credit risks, the charity uses specialist investment managers to balance and limit the overall financial risk by operating a portfolio which provides a high degree of diversification of holdings within a fairly wide band of investment asset classes all of which are quoted on recognised stock exchanges. In addition, the charity does not make use of riskier derivatives or more complex financial instruments in this area. Liquidity risk is expected to be low as all assets are traded in markets with high trading volumes and not in any markets subject to exchange controls or trading restrictions. Further to potential Brexit implications as the new trade agreement is implemented, the charity, like most other entities, is monitoring developments closely but at this stage is relatively confident that the current portfolio and future plans for it will shield it from any significant risks when that process is completed.

Included within accruals and deferred income is deferred income of £387,410 (2022: £380,191). Deferred income comprises Inverclyde Health & Social Care Partnership (HSCP) grant income received in advance for the year ended 31 March 2024 (2022: for the year ended 31 March 2023).

Expenditure

Income

In relation to existing leasehold properties, it is recognised that there are contingent liabilities for dilapidations, however, it is not yet possible to quantify the liabilities.

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 remuneration of key management personnel is as follows.

The disclosures with regard to key management personnel include senior medical staff.