ACT 2014 - Final Accounts PDF

Transcription

COMPANY NO: 03522188
CHARITY NUMBER: 1068617
THE ACT FOUNDATION
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2014
THE ACT FOUNDATION
CONTENTS OF THE FINANCIAL STATEMENTS
Page
Chairman's Review
Trustees' Report including the Strategic Report
Trustees' Responsibilities
2 - 13
14
Independent Auditors' Report to the Members
15 - 16
Consolidated Statement of Financial Activities
17
Consolidated and Company Balance Sheets
18
Consolidated Cash Flow Statement
19 - 20
Notes to the Financial Statements
21 -39
Detailed Schedule of Grants Paid
40 - 45
THE ACT FOUNDATION
CHAIRMAN'S REVIEW
I am delighted to report on a year of continued strong financial performance with both income and funds
available for grant making increasing as well as a further strengthening of the balance sheet. I am grateful to
my dedicated colleagues working across the ACT group who were able to achieve such a good result in spite
of the continuing difficult economic conditions within which we operate.
Excluding grant making to our strategic partners we have continued to provide assistance to a large number
of beneficiaries, making 411 (2013: 454) grants to individuals and 123 (2013: 109) institutional grants in the
year. With the economic climate, here in the UK and globally, continuing to be very uncertain, and with
reduced government spending at all levels, the negative impact on charitable organisations and individuals in
need is increasing. We continue to see increasing numbers of applications and have to make difficult
decisions on the funding that we are able to provide. Whilst recognising our limitations, we will strive to meet
as much of this increased demand as we can using the available income from our investment portfolio, and
to this end we will be increasing our budget allocation for small grants by 20% in 2014.
As I reported last year, the pledges that we made to our strategic partners five years ago are now virtually
fulfilled. At the year-end there remains £112,500 of pledges outstanding, which we will meet over the next
eighteen months. We are extremely proud of the high quality levels of service provision that these
organisations have been able to achieve, in part, with our financial assistance and would like to acknowledge
the dedicated work that they do in directly supporting the beneficiary groups that we seek to help.
The Trustee Board met in April 2014 to conduct a review of its investment and donation strategies. The
outcome of that review was a unanimous decision to continue investing in property to provide the main
source of income for its donations, and also to maintain the current grant making focus on the 'transition' that
young physically and mentally disabled people make as they leave full time education and move into
adulthood. This remains the area in which we feel that so much more could be done to support vulnerable
members of society to enable them to fulfil their potential. We have identified four charities to partner over
the next five years and have recently pledged £1.9M in grants to these charities. We are also working with
three other potential partner charities and I am confident that further significant pledges in support of
transition will be made before I report again next year.
I am also extremely proud to be reporting that the performance of our investments was once again ahead of
our benchmarks. Our investment in Basepoint, a managed workspace provider, produces strong cash flows
and has again seen increases in both occupancy and income during the year. With the addition of two new
centres at Chepstow and Gosport, the latter being one that was managed on behalf of a third party, they now
own and/or operate 30 Basepoint Centres in the UK. All the profits earned by Basepoint are used to fund our
charitable activities. Additionally, each Basepoint Centre supports a small local charity working in their
community and the work of those employed within Basepoint in volunteering and fundraising on behalf of
these organisations sets the company apart from other workspace providers.
The value of our investment portfolio has increased by a net £1.1 M in the year, reflecting the additions in the
Basepoint portfoliO, the sale of our former head office in Windsor and the sale of two small investment
properties. These disposals generated realised gains of £1. 7M. Agreement was reached after the year end
to sell a further two commercial investment properties at £5.5M and these have been reclassified as current
assets. The remaining investments saw a valuation increase of £6.5M.
Investment properties continue to be actively managed. Fundamentally we hold good assets with high
occupancy levels which we seek to increase and these have enhanced our underlying cash flow and driven
the growth in our net asset value. This strong performance has contributed significantly to the successful
delivery of our grant making budgets and pledges this year.
Finally I would like to welcome Andrew Ross and Colin Clarkson who have joined the Trustee Board.
l'C;.._~~
MA Street
Chairman
Page 1
THE ACT FOUNDATION
TRUSTEES'REPORT
The board of trustees of The ACT Foundation present their annual report for the year ended 31 March 2014
under the Companies Act 2006 and the Charities Act 2011, together with the audited financial statements for
that year. The financial statements comply with the Companies Act 2006, the charity's governing document
and the relevant Statement of Recommended Practice (the Charities SORP 2005).
REFERENCE AND ADMINISTRATIVE INFORMATION
The ACT Foundation is a registered charity, registration number 1068617, and a company limited by
guarantee, company number 3522188.
Registered Office
The ACT Foundation
61 Thames Street
Windsor
Berkshire
SL41QW
Trustees, Directors and Member
The Trustees, who are also Directors and Members of the charity, who held office during the year, were as
follows:
M A Street OBE
C J Clarkson
C M Erwood
R P Meadows
P L Nield
J J O'Sullivan MBE
A CRoss OBE
D N Taylor
R F White
(1)
(2)
(3)
Chairman (3)
(appointed 29 April 2014)
(2)
(3)
(appointed 28 January 2014)
Deputy Chairman and Executive Trustee (1) (2)
(3)
- Members of the treasury committee
- Members of the ACT management board
- Members of the remuneration committee
During the year an indemnity insurance policy was maintained for the Trustees.
Company Secretary
J M Kerr
Page 2
THE ACT FOUNDATION
TRUSTEES' REPORT (CONTINUED)
PROFESSIONAL ADVISERS
Auditors
Crowe Clark Whitehill LLP
Aquis House
49-51 Blagrave Street
Reading
Berkshire, RG1 1PL
Bankers
Royal Bank of Scotland
RBS Corporate Office
rd
3 Floor
3 Temple Back East
Bristol, BS1 6DZ
Treasury
DMJ Consulting Services Limited
57 Great Suffolk Street
London, SE1 OBB
Solicitors
Russell Cooke LLP
2 Putney Hill
London, SW15 6AB
Property Advisors
CBRE
The Quay, 30 Channel Way
Ocean Village
Southampton, S014 3TG
Page 3
THE ACT FOUNDATION
STRUCTURE, GOVERNANCE AND MANAGEMENT
Governing Document
The ACT Foundation is governed by Memorandum and Articles of Association (last amended 14 June 2011).
Governing Body
The members of the Governing Body are detailed on page 3. At each Annual General Meeting one third of
the Trustees are subject to retirement by rotation. Retiring Trustees are eligible for re-appointment if a three
quarters majority resolves it. They may be re-elected if eligible. Trustees must retire at the next annual
th
general meeting after attaining their 75 birthday.
The Board may appoint one of their number as chairman, and there is no fixed term for this office. Trustees
may also appoint one of their number as an executive officer on such terms as they determine, such an
appointment shall terminate should that executive officer cease to be a Director.
Reasonable and proper remuneration can be paid to any Trustee for services undertaken in the
administration of the charity provided that they withdraw from any meeting whilst such remuneration is
discussed and that at no time a majority of Trustees benefit from such remuneration.
Public Benefit
The Trustees confirm that they have complied with the duty in Section 17 (5) of the Charities Act 2011 to
have due regard to the guidance issued by the Charity Commission on public benefit. A very good measure
of the public benefit that we create can be found in the grants listed on pages 40 - 45 of this report.
The charitable purpose for the charity within the meaning of the Act is enshrined within its objects, as given in
the memorandum and articles of association and the charitable objects are included in this report.
Recruitment and training of Trustees
Potential Trustees are identified by members of the Board and considered against the Board's requirements
concerning eligibility, competence, specialist skills and knowledge gaps. They seek to achieve a balance of
experience and background. Open advertising is considered when necessary. Training is regularly offered to
all Trustees. Presentations are held in conjunction with the Board's meetings to address particular areas.
Further training is offered at seminars and through briefings at regular meetings.
There is a comprehensive induction process for new appointees to the Board involving briefing meetings with
the Chairman and Executive, and a documentation pack (circulated to all Trustees and regularly updated)
containing all policies, procedures and business plans, as well as formal legal and statutory documentation.
Two new Trustees have been appointed in the year, Mr Ross on 28 January 2014 and Mr Clarkson after the
year end on 29 April 2014. Mr Ross has a strong background in the charitable sector having previously been
Chief Executive at The Children's Trust, whilst Mr Clarkson brings a wealth of property management
experience having previously been Property Director for the group.
Page 4
THE ACT FOUNDATION
Organisational management
The members of the Board are legally responsible for the overall management and control of the charitable
company. The Board meets formally four times a year and at other times as required. The Board has
delegated some powers to sub-committees in respect of Investment, Treasury and Remuneration. These
sub-committees also meet formally four times a year (Remuneration twice a year) and at other times as
required. All Trustees, whether or not they are members of these committees, are invited to attend these
meetings.
o N Taylor, Executive Trustee, has responsibility for the day to day operation of the Charity, with the support
of J M Kerr, Chief Operating Officer and Company Secretary.
Group structure
The ACT Foundation has a number of trading subsidiaries, whose activities and trading performance are
discussed under 'Review of Achievements and Performance.'
There are a number of subsidiary undertakings that are effectively dormant and, over time, will be wound up
as circumstances allow.
Local community relationships and other charitable activities
The ACT Foundation has formed partnerships with other charities that operate in areas where Trustees have
agreed to concentrate their grant making activities. These partnerships have seen substantial pledges made
in previous years in support of physically and mentally disabled children and young adults in the provision of
education, residences and mobility aids.
In particular The ACT Foundation is proud to be associated with and support Autism West Midlands, Core
Arts, First Step Trust, Hollybank Trust, Surrey Care Trust, Treloar Trust and Whizz-Kidz as strategic
partners.
In addition each Basepoint Centre supports a local charity within its region, organising fundraising activities
and community days which help promote our ethos of developing sustainable communities and encouraging
good citizenship.
Environmental impact
In common with many businesses operating in this market, the group regularly reviews energy consumption
and is committed to ensuring that it minimises its environmental impact and is able to comply with future
carbon reduction commitment requirements.
The Trustees recognise that environmental protection is a very important issue and they are committed to
minimising the environmental impact of the group's activities and in particular reducing CO 2 emissions,
caused by energy consumption.
Risk management
The Trustees have examined the principal areas of the Charity's operation and considered what major risks
arise in each of these areas. In the opinion of the Trustees, the Charity has established resources and
review systems that, under normal conditions, should allow the risks identified by them to be mitigated to an
acceptable level in its day-to-day operations.
The Charity conducts an annual risk audit and the next audit will be undertaken in September 2014.
Page 5
THE ACT FOUNDATION
OBJECTS, AIMS, OBJECTIVES AND PRINCIPAL ACTIVITIES
Charitable objects
The objectives of the charity are to assist those in poverty or who are aged and in need or who have a
physical or mental disability, and to do so in anyone or more of the following ways: provide assistance to persons wheresoever located who are in need by reason of youth, age, illhealth, disability, financial hardship or other disadvantage;
prevent or relieve poverty;
advance health;
advance education; and
advance citizenship and community development by in particular (but not by way of limitation)
promoting the efficiency and effectiveness of other charities.
Strategic aims and intended effect
The ACT Foundation's mission statement is "ACT to enhance the quality of fife for people in need'.
Trustees currently focus their efforts principally on physically and mentally disabled children and young
adults, in particular on the transition phase from education to adulthood, forming strategic partnerships with
organisations working in these areas, as well as assisting individuals and other smaller charities.
Objectives for the year
Trustees seek to use the income from their investments to further their mission statement by providing the
majority of their grant support to building-related projects, equipment provision and seed funding for pilot
projects in the areas of primary focus.
Grant pledges made to strategic partners brought forward from the previous year were £530,014 and
£266,106 was paid in the year against these pledges. No new pledges were made in the year and two
pledges were partially cancelled in the year at £151,408. Total pledges outstanding at the year-end
amounted to £112,500. In addition, a £1 M ten year interest free loan was advanced to a strategic partner in
the year ended 31 March 2011 and the balance outstanding at 31 March 2014 was £750,000.
General applications which represent individuals and smaller charities are seen by the Trustees as an
important and integral part of their grant making objectives. Grants of this type totalled £866,895 in the year.
Such grants provide real positive impacts to the lives and independence of an increasing number of disabled,
elderly and disadvantaged people. Trustees are seeking to grow this area of grant making in future years and
as such have increased the budget for 2014/15 by 20% to £1.2M.
Overseas, objectives continue to be met by the on-going involvement in Meninos do Morumbi in Brazil with
the inclusion in our assets of a school building (held by an overseas subsidiary undertaking) and an interestfree loan to Homeless International supporting funding for housing projects in India and Malawi, each being
accounted for as a programme related investment. In addition £36,500 of donations were made to other
overseas organisations, this figure being included in the general donations total above.
Page 6
THE ACT FOUNDATION
Strategies to achieve the objectives
By seeking to establish strategic partnerships with charities working in areas and with beneficiaries that the
Trustees have agreed to concentrate their grant making activities on, the objectives for the largest part, by
value, of the grant making programme are met.
These relationships are typically, but not exclusively, in support of the "transition" that young physically and
mentally disabled people make as they leave full time education and move into adulthood.
The charity seeks applications from individuals and other charitable organisations by advertising its existence
and publicising its application procedures on its website. It is also listed as a grant maker under its
beneficiary criteria in a number of other media, as well as with the Charity Commission. The charity receives
many more applications than it is able to fund, and with limited resources must prioritise in the direction of its
grant making.
Measuring impact
Most of our grant-making is reactive and impact is measured against what organisations and individuals tell
us they are seeking to achieve. In most cases we are part of a funding consortium and only contribute a
portion of the overall funding need and cannot take sole credit for the many remarkable outcomes that are
achieved, especially by our charity partners operating in the care and social services sectors for which we
have much admiration. We have no generic set of objectives but believe our impact can be measured from
the hundreds of thank you letters we receive each year from our beneficiaries, from seeing building projects
and facilities delivered months and sometimes years earlier than would otherwise have been possible, from
seeing pilot projects flourish and grow when others would not take the risk on funding and from seeing lives
transformed with just a very small financial contribution.
Principal activity
The principal activities of The ACT Foundation are the furtherance of its charitable objects as described
above. The ACT Foundation group continues to invest in, manage and maintain property, both residential
and commercial, in order to generate funds for this purpose.
PROVISION OF INFORMATION TO AUDITORS
In determining how amounts are presented within items in the Statement of Financial Activities and balance
sheet, the Trustees have had regard to the substance of the reported transaction or arrangement, in
accordance with generally accepted accounting principles or practice.
So far as each of the Trustees is aware at the time the report is approved:•
•
there is no relevant audit information of which the company's auditors are unaware; and
the Trustees have taken all steps that they ought to have taken to make themselves aware of any
relevant audit information and to establish that the auditors are aware of that information.
AUDITORS
In accordance with Section 485 of the Companies Act 2006, a resolution proposing the re-appointment of
Crowe Clark Whitehill LLP as auditors to the company will be put to the Annual General Meeting.
Page 7
THE ACT FOUNDATION
STRATEGIC REPORT OF THE TRUSTEES
REVIEW OF ACHIEVEMENTS AND PERFORMANCE
Grant making policy
The company employs a chief operating officer, J M Kerr, to oversee its operation, and a charitable grants
manager to enable applications to be assessed and grants to be made within the criteria laid down. The
company maintains a presence on the internet at www.theactfoundation.co.uk and grant application forms
are available from this website or the principal office.
It is the Trustees' intention to continue the expansion of direct charitable donations with the aim of covering a
diverse and geographically spread cross-section of those elderly, disabled and in poverty who are in need of
assistance, principally within the United Kingdom . As previously noted, the Trustees are seeking to
concentrate resources on the disabled, both physically and mentally. To this end the Trustees intend to
continue to build relationships with other organisations with similar aims and objectives that provide direct
assistance, in order to establish and maintain donation streams which will be used to best effect.
Within the parameters set down by the Trustees, donations below £2,500 can be authorised by a staff
committee. Between £2,501 and £10,000 the Charity's executive officers (0 N Taylor and J M Kerr) authorise
donations. Grants of between £10,001 and £50,000 can be authorised by the Executive Trustee and another
Director, whilst all donations over £50,000 are set before the full board for approval.
Donations (£M)
31----.-------2
+-
~~I- -·- -·-····-- ··---·-----· ---- -·· -----
---- -..-... .-..---.------.---- ------.--------
.Doo~~ch••
• Doo Itioru paid
I
• Outilandlnll pledfe'
1
II
o +-2010
2011
2012
2013
2014
NB. Donations are charged to the accounts in the year they are pledged. The fluctuating charge in respect
of donations year on year reflects this accounting treatment, and is represented in the above chart with real
cashflow shown as donations paid, and pledges carried forward representing the balance of funding to be
paid over the duration of the project.
Page 8
THE ACT FOUNDATION
STRATEGIC REPORT OF THE TRUSTEES (CONTINUED)
During the period direct charitable donations totalled £715,487 (2013: £987,224), there were no (2013: one)
new pledges made (2013: £50,000). The company continues to support a wide range of charities and
individuals, some of which are as follows:
Autism West Midlands - pledge of £500,000, of which £100,000 was paid in the year, towards
the provision of two new family support workers and an information co-ordinator supporting the
extension of their Information Service Helpline assisting people with autism, and their families
and carers. The pledge is being met over five years, with £25,000 outstanding at the year end.
Core Arts - the original pledge of £75,000 towards co-ordination of an education programme
supporting people with mental health issues over three years was completed two years ago. An
additional £50,000 pledge supporting the programme for two further years was made last year
and has now been completed.
First Step Trust - pledge of £375,000, of which £46,925 was paid in the year, towards the startup and operational costs of a garage facility in South East London providing employment training
to people with mental health issues. £63,075 of the original pledge was not required as the
project became self-sustainable ahead of its target, a successful outcome, and this amount was
credited against the donation charge in the year.
Hollybank Trust - pledge of £500,000, of which the final balance of £12,000 was paid in the year,
towards the construction costs of a new children's residential unit for disabled children. The
facility is was opened two years ago. In additional a £1 M ten year interest free loan to further
support the project was advanced in the year ended 31 March 2011. Two repayments have
been made to date and the balance of £750,000 recoverable over the next six years.
Surrey Care Trust - pledge of £114,960, of which the final balance of £7,181 was paid in the
year, towards STEPS mentoring programme supporting young people who are not in education,
employment or training.
Treloar Trust - pledge of £500,000, of which £75,000 was paid in the year, supporting an
expansion of outreach services for young disabled people. Part of this project failed which has
resulted in £88,333 of the original pledge being withdrawn being credited against the donation
charge in the year. The outstanding £87,500 of the pledge is being met over three years.
Whizz-Kidz - £110,000 paid in the year and match funded towards the cost of mobility aids for
disabled children, allocated on an individual basis.
As noted in the Chairman's Statement, since the year end Trustees have carried out a strategic review of
both investments and grant making. As a result of the latter the focus on "transition" was restated and an
initial £1.9M pledged to four partner charities which will be paid over the next five years. We are also
undertaking further due diligence on three other potential partners which, dependent upon the outcome, may
well see further significant pledges being made in the next twelve months. These, and any additional
pledges made, will be accounted for in the next year's financial statements.
In addition to the grant making detailed above, a large number of smaller donations were made in the period
across a diverse range of beneficiaries. These included individuals provided with equipment such as stair
lifts, bathroom adaptations and mobility aids to enable them to maintain their independence (too numerous to
list), and a wide range of organisations and charities, both local and national. In total 411 (2013: 454) grants
to individuals were made with an aggregate value of £432,198 (2013: £499,025) and 123 (2013: 109)
institutional grants were made with an aggregate value of £434,697 (2013: £438,199).
Page 9
THE ACT FOUNDATION
As described in previous years' reports, the Trustees are supporting an educational project for children of
shanty town dwellers in Sao Paulo, Brazil called Meninos do Morumbi. The project is based around music,
sport and the arts, but also provides courses in English, computing, life skills and employment training.
Assistance is being given by the provision of accommodation to allow the project's future expansion to take
place from a position of stability. The purchase of the project's current building was completed seven years
ago through a wholly owned Brazilian subsidiary company set up specifically for this purpose. The rental
charge has been waived. In addition, the £200,000 interest free loan to Homeless International supports
funding for housing projects in India and Malawi continues.
There were 2 (2013: 4) donations totalling £36,500 (2013: £18,750) in the year in respect of other overseas
charitable projects, these being included in the institutional grants figures above.
FINANCIAL REVIEW
Investment policy and performance
In order to support grant-making a sustainable level of operating surpluses is required from investment
activities, increasing year on year, with underlying net asset value growth.
The investment portfolio now includes a mix of property held directly by The ACT Foundation, spread across
the various property sectors and with a range of lease expiry dates, and Basepoint Centres Limited, whose
trading activities comprise operating managed workspace. Continued growth and investment in both of
these areas is expected as the economic conditions slowly begin to recover.
The Trustees are confident that increasing operational surpluses will be available to further support the
expansion of charitable giving.
The ACT Foundation has 19 subsidiary undertakings (of which 16 are dormant or non-trading), the activities
of which are described in note 9b to the financial statements. The net income of the trading subsidiaries is
disclosed in note 9b to the financial statements. These undertakings donated £2,908,744 (2013: £3,178,516)
to the company under the gift aid scheme for the year. It remains these undertakings' priority to support and
financially assist the Charity.
The company's other investments represent; the entire share capital of ACG Participacoes Ltd, a company
incorporated in Brazil, which owns the land and buildings from which a school is run for charitable purposes,
a £750,000 loan advanced to Hollybank Trust, interest free and repayable over six years, to assist with the
construction of accommodation for disabled children (see above) and a £200,000 loan advanced to
Homeless International, interest free, to assist with housing projects in India and Malawi (each included
within tangible fixed assets as programme related investments). These investments are regarded as part of
the charitable objects.
The fall in property values as the economy went into recession has been the major issue for the group, with
directly held property and Basepoint both experiencing steep falls in valuation in 2009 reflected by unrealised
losses on investment assets of £34.3M. Property prices have begun to recover, although they still have some
way to go before they approach their 2008 pre-recession levels. The directly held portfolio increased in value
by 8.7% (2013: decrease 6.5%) reflecting market demand for this type of property whilst the Basepoint
properties increased in value by 4.6% once again reflecting strong performance and cash flows (2013:
increase 3.3%). Overall unrealised gains on investment assets were £6.6M (2013: unrealised gains £O.4M).
Trustees remain cautious, as with the economy showing only marginal signs of improvement any gains could
easily be quickly eroded. However, despite very challenging trading conditions in the current economic
environment the Basepoint business has maintained its market share, utilising a mix of offers and incentives,
and overall has performed extremely well in the year.
Page 10
THE ACT FOUNDATION
We took advantage of the strengthening market sentiment to dispose of three properties in the year; one
commercial, one residential and the sale of the charity's former head office premises in Park Street,
Windsor, following the successful conversion of the space to residential which was completed at the end of
April 2013. These sales realised gains of £1 .7M in the year. In addition to these, since the year end an
additional two commercial properties have been either been sold or agreement has been reached for a sale.
These properties, valued at £5.5M, have been transferred to current asset investments at the year end. The
remaining residential portfolio consisting of two properties is also earmarked for disposal over the next year.
The weight of pension and other fund monies continuing the move back into property investment, whilst
being positive when disposals are being considered, has meant that further investment in directly held
property at reasonable value remains extremely difficult, particularly when looking for good longer term
income supported by good location and strong tenant covenant. Despite this, two properties were purchased
in the year, adding workspace in Chepstow and Gosport to the Basepoint portfolio.
Bank borrowings stood at £60M at the year end, down from £69.1M the previous year, the reduction being
achieved by utilising the disposal proceeds described above . The group's current borrowing facility runs until
September 2014 and a tender process has been completed in respect of its renewal. Trustees have agreed
to renew the facility with RBS, the group's current bankers, and the new facility takes effect from 1 July 2014.
All the financial covenants set by the bank and the Charity's own internal gearing policy, continue to be met.
The group invests in both residential and commercial property and related activities, so as to achieve a
combination of both capital growth and investment income that enables the company to meet its charitable
objects.
Investment decisions under £10M are delegated to the Board of Directors of each subsidiary, or in the case
of the Charity, to a Management Board. Decisions regarding investments of more than £10M are authorised
by the full Board.
Investment performance is formally reviewed by the Board on a quarterly basis. The overall performance of
our investment portfolio is benchmarked against the performance of the Investment Property Databank
(IPD), the Property Income Trust for Charities (PITC) and the Charities Property Fund (CPF). In the year
ended 31 March 2014 the combined total return for The ACT Foundation's property investment portfolio was
15.55% (2013: 9.35%), 9.8% income and 5.75% capital, which comfortably exceeded the benchmarks of IPD
at 14%, PITC at 9.1% and CPF at 12.4% (2013: 2.4%, 3.3% and 2.3% respectively)
Net Asset Value (£M)
70
60
50
40
30
20
10
0
2010
2011
2012
2013
2014
Page 11
THE ACT FOUNDATION
Reserves policy
After deducting the value of fixed assets held for the Charity's own use, group reserves available for current
activities are £61,290,106 (2013: £49,350,259). These reserves principally represent the equity in the
property investments held to generate income for the Charity.
The policy is to ensure the Charity has sufficient funds available to meet current and future grant
commitments as well as service debt and cover administrative costs of the Charity. Grant-making is
budgeted on an annual basis; however, due to the requirement to recognise grants when they are pledged,
the level of grants included in the financial statements varies from year to year. On average free reserves are
not expected to exceed more than three years' worth of annual costs.
The level of reserves reflects the residential and commercial property investments that are held in order to
generate income to support the Charity's grant making activities.
If the value of these investments, adjusted for borrowings, is excluded from the calculation, the remaining
free reserves are a surplus value of £10,295,106 (2013: surplus £8,600,704). Accrued pledges outstanding
at 31 March 2014 were £112,500 (2013: £530,014).
Major Risks
The Charity undertakes a risk audit on an annual basis and has implemented risk management strategies
and procedures to minimise identified risk areas as far as possible. The risk management strategy is
concerned with ensuring that the level of risk involved is acceptable and reasonable steps are taken to
manage and control the risk. The key risks have been identified and grouped under the following headings:
i)
Governance
ii)
Asset & Facilities Management
iii)
Financial & Investment Management
iv)
Compliance with Law & Regulation
v)
Grants & Donations
Policies and procedures are in place to mitigate the identified risks in each of these areas and an annual risk
audit is undertaken to ensure continued compliance with these policies and procedures and to identify new or
changing risk profiles.
PLANS FOR THE FUTURE
Grant Making
New strategic partnerships have been formed which fulfil the charitable objectives and the Trustees look
forward to seeing these develop and strengthen over the course of the next few years. The ACT Foundation
will, however, continue to provide funds as a grant making charity and will not seek to provide any direct
service provision to any of its beneficiaries.
As previously reported, Trustees have agreed a 20% increase in the small grant programme budget from
£1 M for 2013/14 to £1.2M for 2014/15 and intend to continue to grow this programme in value by 20% per
annum, funds permitting, over the course of the current five year plan.
Page 12
THE ACT FOUNDATION
Investments
The Trustees undertook a review of investment strategy in April 2014. This review took into account the
guidelines set out by the Charity Commission on risk and investment management, including its most recent
checklist 'The Big Board Talk".
Following this detailed review Trustees unanimously agreed that they will continue to invest in commercial
property for the foreseeable future, but will continue to monitor alternative asset classes and benchmark risk
and performance to ensure their investment strategy fully meets the charity's needs.
Basepoint is an integral part of The ACT Foundation's investment strategy, and has proven its resilience
throughout the recession contributing strong cash flows driven by high levels of demand. It further supports
the charity's objectives in respect of helping to promote citizenship and community development by
facilitating job creation, building sustainable communities and advancing the work of other charities locally.
We plan to continue to grow Basepoint whenever possible, principally through managing centres for third
parties under the Basepoint brand. Development of new centres will remain on hold until such time as
market conditions improve and economic demand returns.
The investment strategy will continue to be funded by a mix of debt and equity, with the objective of lowering
the debt gearing to its pre-recession level of 50% (2013/14: 53%), and interest rate hedging considerations
will continue to form an important part of our strategic risk management plans.
The Trustees Report and the Strategic Report
have been approved by order of the Board on
M A Street
Chairman
Page 13
THE ACT FOUNDATION
TRUSTEES' RESPONSIBILITIES
The trustees (who are also directors of The ACT Foundation for the purposes of company law) are
responsible for preparing the Trustees' Report, Strategic Report and the financial statements in accordance
with applicable law and regulations.
Company law requires the trustees to prepare financial statements for each financial year. Under that law the
trustees have elected to prepare the financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards) and applicable law.
Under company law the trustees must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the
group for that period. 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 judgments and accounting 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;
•
prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the company will continue in business.
The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain
the company and group's transactions and disclose with reasonable accuracy at any time the financial
position of the company and group and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the company and group and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Page 14
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
THE ACT FOUNDATION
We have audited the financial statements of The ACT Foundation for the year ended 31 March 2014
which comprise the Group Statement of Financial Activities, the Group and Company Balance Sheets, the
Group Cash Flow Statement and the related notes numbered 1 to 21.
The financial reporting framework that has been applied in their preparation is applicable law and United
Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
charitable company's members those matters we are required to state to them in an auditor's report and
for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the charitable company and the company's members as a body, for our audit work, for
this report, or for the opinions we have formed.
Respective responsibilities of Trustees and auditor
As explained more fully in the Statement of Trustees' Responsibilities, the trustees (who are also the
directors of the charitable company 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.
Our responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to
comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material misstatement,
whether caused by fraud or error. This includes an assessment of: whether the accounting policies are
appropriate to the company's circumstances and have been consistently applied and adequately
disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall
presentation of the financial statements.
In addition, we read all the financial and non-financial information in the Trustees' Report and Strategic
Report to identify material inconsistencies with the audited financial statements. If we become aware of
any apparent material misstatements or inconsistencies we consider the implications for our report.
Page 15
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
THE ACT FOUNDATION (CONTINUED)
Opinion on financial statements
In our opinion the financial statements:
•
give a true and fair view of the state of the group's and the charitable company's affairs as at 31
March 2014 and of the group's incoming resources and application of resources, including its
income and expenditure, for the year then ended;
•
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
•
have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Trustees' Annual Report and Strategic Report for the financial
year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us
to report to you if, in our opinion:
•
the parent charitable company has not kept adequate accounting records; or
•
the parent charitable company financial statements are not in agreement with the accounting
records and returns; or
•
certain disclosures of trustees' remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Alastair Lyon
Senior Statutory Auditor
For and on behalf of
Crowe Clark Whitehill LLP
Statutory Auditor
Reading
Date:
Page 16
THE ACT FOUNDATION
CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES
(INCLUDING AN INCOME AND EXPENDITURE ACCOUNT)
Notes
INCOMING RESOURCES
Incoming resources from generating funds:
- Investment income
- Income from properties including joint ventures
- Other investment income
- Less share of income of joint ventures
3
- Group investment income
- Donations
Total incoming resources
RESOURCES EXPENDED
Cost of generating funds:
- Property operating costs
- Loan interest and bank charges
- Investment management fees and costs
Net incoming resources available for charitable application
Charitable activities:
- Grant making costs
4,5
Governance costs:
2014
£
2013
£
17,983,241
10,174
(140,855)
16,922,091
13,793
(96.758)
17,852,560
16,839,126
25
17,852,560
16,839,151
9,201,737
3,540,692
630,493
8,349,220
3,722,831
647,614
13,372,922
12,719,665
4,479,638
4,119,486
774,874
1,029,821
71,634
68,320
Total resources expended
5
14,219,430
13,817,806
Net incoming resources before investment
gains/(Iosses)
6
3,633,130
3,021,345
9,677
3,132
Realised losses on tangible fixed assets
Realised gains on investment assets
1,707,820
138,859
Surplus for the year
5,350,627
3,163,336
6,639,353
99
(495,110)
372
Net movement in funds
11,990,079
2,668,598
Reconciliation of funds
Total funds brought forward at 1 April 2013
51,449,329
48,780,731
£: 63,439,408
£51,449,329
Share of net incoming /(outgoing) resources on joint venture
Other recognised gains/(Iosses)
Unrealised (Iosses)/gains on investment assets
Minority interest
Total funds carried forward at 31 March 2014
All operations are continuing.
10
Included within the group results is a surplus of £11,875,510 (2013: £1,000,485 surplus) in respect of
The ACT Foundation. Please refer to Note 2 for a summary of the charity and the significant subsidiary
trading results. There are no recognised gains or losses other than those reported above.
The notes on pages 21 to 39 form part of these financial statements
Page 17
THE ACT FOUNDATION
CONSOLIDATED AND CHARITY BALANCE SHEETS
COMPANY REGISTRATION NUMBER: 03522188
31 MARCH 2014
Group
Notes
FIXED ASSETS
Tangible assets
Investments
- Investment properties
- Investments in subsidiaries
- Programme related
investments
- Joint ventures
Charity
2014
2013
2014
2013
£
£
£
£
8
2,149,302
2,099,070
1,480,775
1,418,540
9a
9b
110,995,000
109,850,000
71,945,000
46,091,161
73,825,000
46,092,151
9c
9d
1,473,844
47,292
1,598,844
37,615
1,467,344
1,592,344
114l 665 l 438
113,585,529
120l 984 l 280
122,928,035
9a
5,540,000
3,507,563
5,540,000
3,507,563
9c
125,000
798,888
8 l 536 l 385
125,000
1,107,729
8.464,626
125,000
3,651,284
1l 589 l 697
125,000
2,804,091
1,700,052
15,000,273
13,204,918
10,905,981
8,136,706
(5 l 666 l 882)
(8,582,015)
(27 l 567 l 913)
(30,952,070)
NET CURRENT
ASSETS/(LlABILITIES)
9 l 333 l 391
4,622,903
(16 l 661 l 932)
(22,815,364)
TOTAL ASSETS LESS
CURRENT LIABILITIES
123,998,829
118,208,432
104,322,348
(60,578,136)
(66,777,719)
(44,801,297)
CURRENT ASSETS
Investment properties
Programme related
investments
Debtors
Cash at bank and in hand
CREDITORS: Amounts
falling due within one year
11
12
13
CREDITORS: Amounts
falling due after more than
one year
14
Minority Interest
10
NET ASSETS
181715
18,616
£ 63,439,408
£ 51.449,329
£ 59,521,051
73,038,692
(21,589,363)
56,718,319
2l 802,732
£ 51 .449, 329
£ 59,521,051
100,112,671
(52,467,130)
UNRESTRICTED FUNDS
Income and expenditure
Revaluation reserve
15
15
77,083,552
(13 l 644 l 144)
£ 63,439,408
52,689,686
(5,044,145)
£ 47.645,541
Approved and authorised for issue by the trustees on
and signed on their behalf by
~.~L--A..
M A Street
Chairman
/
Page 18
THE ACT FOUNDATION
CONSOLIDATED CASH FLOW STATEMENT
2013
2014
Notes
£
£
£
£
CASH FLOW STATEMENT
Net cash inflow from
operating activities
Returns on investments
and servicing of finance
Interest received
Interest paid
2,435,641
7,715,245
18
10,174
(3,360,948)
13,793
(3,507.675)
(3,350,774)
Capital expenditure
Payments to acquire tangible assets
(including investment properties)
Introduction of reserves
- tangible fixed assets at 1 April 2013
Proceeds of sale of tangible assets
(including investment properties)
Repayment of social
investment
(3,493,882)
(3,370,897)
(3,203,900)
1,280
7,920,383
3,113,859
125,000
125,000
Net cash inflow/(outflow)
from capital expenditure
4,841,483
(130.758)
Net cash inflow/(outflow)
before financing
9,205,954
(1,188,999)
(6,000,000)
(33,750)
2,000,000
Financing
Loan movements
Loan notes repaid
Increase in cash
19
£ 3,172,204
£
811,001
Page 19
THE ACT FOUNDATION
CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)
RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET DEBT (Note 19)
2014
Notes
£
2013
£
Increase in cash in the year
Cash inflow/(outflow) from movement in debt
3,172,204
6 2033 2750
811,001
(2,000.000)
Movement in net debt in the year
9,205,954
(1,188,999)
(61 ,212 2705)
(60,023,706)
£: (52,006!151)
£ (g1,212,705)
Net debt at 1 April 2013
Net debt at 31 March 2014
19
Page 20
THE ACT FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
1.
ACCOUNTING POLICIES
a)
Basis of accounting
The financial statements are prepared under the historical cost convention as modified by the
revaluation of certain fixed assets and in accordance with the Companies Act 2006, the
Statement of Recommended Practice: Accounting and Reporting by Charities (SORP 2005) and
other applicable Accounting Standards.
The only departure is from the statutory accounting principles for investment properties
described in 1f) below.
The trustees consider that there are sufficient reserves at 31 March 2014 to manage any
foreseeable downturn in the UK and global economy. The trustees consider that there is a
reasonable expectation The ACT Foundation has adequate resources to continue in operational
existence for the foreseeable future and for this reason, the trustees continue to adopt the 'going
concern' basis in preparing the accounts.
b)
Basis of consolidation
The consolidated accounts include the trading activities, assets and liabilities of the group
subsidiary companies in accordance with the Charity SORP. Intra-group transactions have been
eliminated on consolidation.
As permitted by section 408 of the Companies Act 2006 and in accordance with paragraph 397
of the Charities SORP 2005, no separate Statement of Financial Activities has been presented.
Managed Enterprise Systems Hosting Limited has been included in the consolidated accounts
as a joint venture.
c)
Incoming resources
Rental income is accounted for on an accruals basis. Trading turnover is included on the basis
of sales invoiced or work done in accordance with the terms of contract. All other income,
including payments under Gift Aid, is accounted for under the accruals concept.
Deferred income exists due to the fact that property income is invoiced in advance for rents due.
d)
Resources expended
Expenditure is accounted for on an accruals basis and is classified under headings that
aggregate all costs related to that category. Costs are allocated on a direct cost basis.
Governance costs comprise the cost of running the charity, including external audit, legal,
consulting and construction and statutory compliance costs.
e)
Liability recognition
Liabilities in respect of grants payable are only recognised when the Grant Committee approves
the grant and the recipient has met all conditions for payment.
Page 21
THE ACT FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1.
ACCOUNTING POLICIES (CONTINUED)
f)
Investment properties
Some of the group's properties are held for long-term investment and, in accordance with
Statement of Standard Accounting Practice No. 19, are included in the Balance Sheet at their
open market values. The surpluses or deficits on revaluation of such properties are transferred
to the investment property revaluation reserve unless the deficit exceeds cost and is not
expected to be temporary in which case it is transferred to the income and expenditure account.
Depreciation is not provided in respect of freehold investment properties. Leasehold investment
properties are not amortised where the unexpired term is over twenty years.
This policy represents a departure from statutory accounting principles, which require
depreciation to be provided on all fixed assets. The trustees consider that this policy is
necessary in order that the financial statements may give a true and fair view because current
values and changes in current values are of prime importance rather than the calculation of
systematic annual depreciation. Depreciation is only one of many factors reflected in the
valuation and the amount that might otherwise have been shown cannot be separately identified
or quantified.
Where investment properties are held to be sold, the assets are reclassified as being current
assets and included in the Balance Sheet at their open market values.
g)
Programme related investments
Programme related investments are stated at the cost of investment.
h)
Other tangible fixed assets
Depreciation is provided on other fixed assets, excluding freehold land, at rates calculated to
write off their cost less estimated residual value over their useful economic lives as follows: Freehold buildings
Furniture and equipment
Computer equipment
Plant and machinery
Motor vehicles
Assets under construction
- 2% on a straight-line basis
- 25% on a reducing balance basis
- 25% on a reducing balance basis
- no depreciation
The capitalisation policy for the purchase of properties is to capitalise all the costs of purchase,
any abortive costs are written off. For other fixed assets the capitalisation policy is set at £100.
i)
Investments
Investments are stated at market value, or where no market value is readily available, at net
asset value. Any changes on value are transferred to the revaluation reserve. Realised gains
are calculated based on net proceeds compared to the carrying amount and are credited or
debited to reserves as appropriate.
Page 22
THE ACT FOUNDATION
1.
ACCOUNTING POLICIES (CONTINUED)
j)
Reserves
Reserves represent unrestricted funds available for the future activities of the Charity.
k)
Pension costs
The ACT Foundation Group participates in the Social Housing Pension Scheme (SHPS), and
retirement benefits to employees of the Group are funded by contributions from all participating
employers and employees in the scheme. It is not possible to identify the underlying assets and
liabilities belonging to individual participating employers. Therefore the scheme cannot be
consolidated into the accounts in accordance with FRS 17. The expected cost to the Group of
pensions is charged to the Statement of Financial Activities so as to spread the cost of pensions
over the service lives of employees.
A defined contribution pension scheme is also operated by The ACT Foundation Group with the
pension charge representing the amounts payable by the Group to the fund in respect of the
year.
I)
Leased assets
Payments made under operating leases are charged to the Statement of Financial Activities on a
straight-line basis over the lease term.
m)
Taxation
The ACT Foundation is a registered Charity and therefore is not liable to income tax or
corporation tax on income derived from its charitable activities as it falls within the various
exemptions available to registered Charities.
Page 23
THE ACT FOUNDATION
2.
TRADING SUMMARY OF SUBSIDIARIES AND PARENT COMPANY
The Charity has several wholly owned trading subsidiaries, details of which are given in Note 9b.
The companies donate profits to the Charity under the Gift Aid scheme. A summary of the
company and the significant subsidiary trading results are shown below. Audited accounts for
the subsidiaries are filed with the Registrar of Companies.
The
ACT
Foundation
£
Incoming resources
Income from properties
Gift aid income
Donations
Investment income
8,838,515
2,908,744
Basepoint
Ltd (group)
£
ACG Rented
Properties
Pic
£
9,572,202
785
2,394
11,754,254
9,572,987
2,394
Resources expended
Investment management fees and costs
Property operating costs
Loan interest and bank charges
Charitable activities
Governance costs
1,198,824
3,330,573
2,751,670
774,874
5,888,779
767,634
479
2,905
Total resources expended
8,127,575
6,656,413
3,384
Net movement for the year
Gift Aid payable
3,626,679
2,916,574
(2,908,744)
Retained income for the year
3,626,679
7,830
Realised gains on tangible fixed assets
Unrealised gains on investment assets
1,707,820
6,541,011
97,353
Net movement in funds
11,875,510
105,183
(990)
Total funds brought forward
47,645,541
25.122,338
16,257,560
25.227,521
16,256,570
48,492,987
20,820,48~
Total incoming resources
Total funds carried forward
Total assets
131 ,890,261
Total liabilities
(72,369,21 Q)
(990)
(990)
(4,563,912)
Page 24
THE ACT FOUNDATION
3.
INVESTMENT INCOME
Bank deposit interest
4.
2014
2013
£
£
10.174
£
GRANTS PAYABLE IN THE FURTHERANCE OF CHARITY OBJECTIVES
2014
£
2013
£
Individuals 411 (2013: 454)
Organisations 123 (2013: 109)
Total grants to non-strategic partners
432,198
434 1697
866,895
499,025
438,199
937,224
Pledges made to strategic partners:
Core Arts - Support of the education programme
Treloar Trust - Contributions towards the 'Outreach' projects
First Step Trust
(88,333)
(63 1075)
50,000
115 1481
£
At 31 March 2014 the charity had programme related investments totalling £950,000, the
notional interest foregone in the year through these investments was £50,350 based on the
current cost of borrowing.
5.
TOTAL RESOURCES EXPENDED
Staff
Costs
£
Costs of generating
funds
Property operating costs
Loan interest and bank
charges
Investment management
fees and costs
3,384,012
Other
costs
£
5,414,704
Depreciation
2014
£
Total
£
403,021
3,540,692
630A93
Charitable activities
Grant making costs
(note 4)
9,201,737
8,349,220
3,540,692
3,722,831
630A93
647,614
13 1372 1922
12,719,665
4 1014 1505
8 1955 1396
59 1387
715,487
774 1874
1,029,821
71 1634
71 1634
68,320
£:14,2:19,430
£ 13.,8.17,806
Governance costs
Total resources
expended
403,021
2013
Total
£
£ 4,013,892
£ 9,142,511
£:
403!02:1
Page 25
THE ACT FOUNDATION
5.
TOTAL RESOURCES EXPENDED (CONTINUED)
Included in other costs is interest payable as follows:-
Bank and loan interest
6.
2014
2013
£
£
£ 3.360.948
£ 3.507.675
NET INCOMING RESOURCES
2014
2013
£
£
This is stated after charging/(crediting):
Group auditors' remuneration - Audit fees:
- relating to parent company
- relating to subsidiaries
- Corporation tax
- Other
Depreciation of tangible fixed assets
23,600
26,250
7,930
6,000
23,000
25,600
7,700
g03,021
g31!125
Page 26
THE ACT FOUNDATION
7.
STAFF NUMBERS AND EMOLUMENTS
Staff costs consist of:
Group
Wages and salaries
Social security costs
Other pension costs
2014
2013
£
£
3,518,338
343,616
211,938
3,231,957
308,308
160,617
£ 4.073.892
£ 3,700,882
The average monthly number of full time equivalent employees during the period was as follows:
2013
Number
2014
Number
Property management
Administration/management
83
15
80
13
98
The number of employees with total emoluments in excess of £60,000 (including taxable benefits
but excluding pension scheme contributions):
2014
Number
£60,000
£70,000
£120,000
£130,000
£140,000
£290,000
£300,000
- £70,000
- £80,000
- £130,000
- £140,000
- £150,000
- £300,000
- £310,000
3
1
1
2013
Number
3
1
1
1
1
3 of the highest paid employees (2013: 4) were accruing benefits under defined benefit pension
schemes.
3 of the seven highest paid employees (2013: 2) are in the defined contribution pension scheme at
a cost of £14,124 (2013: £10,378).
Page 27
THE ACT FOUNDATION
7.
STAFF NUMBERS AND EMOLUMENTS (CONTINUED)
Trustees
2013
2014
£
Emoluments (including pension costs and taxable benefits)
£
367.018
£
£
371,196
During the year retirement benefits were accruing to 1 director (2013: 1) in respect of defined
benefit pension schemes.
The highest paid director during the year received emoluments of £327,018 (2013: £313,696).
During the year 3 trustees (2013: 2) received reimbursed expenses in respect of travel and
subsistence of £1,463 (2013: £2,000).
These charges are under the authority of the Memorandum and Articles.
Page 28
THE ACT FOUNDATION
8.
TANGIBLE ASSETS
Group
Freehold land
and buildings
Other
equipment
£
Cost
At 1 April 2013
Additions
Disposals
Revaluation
At 31 March 2014
Depreciation
At 1 April 2013
Charge for the year
Disposals
On revalued assets
£
3,010,456
276,253
(2,060)
4,285,456
276,253
(2,060)
75,000
1 ,350,000
3.284,649
4,634,649
76,500
25,500
2,109,886
377,521
(2,060)
2,186,386
403,021
(2,060)
(102,000)
2,485,347
2,485,347
£ 799,302
£2,149,302
£ 900,570
£2.099,070
1,275,000
75,000
(102,000)
At 31 March 2014
Net book value
At 31 March 2014
Total
£
£ 1,350,000
At 31 March 2013
Charity
Cost
At 1 April 2013
Additions
Disposals
Revaluation
At 31 March 2014
Depreciation
At 1 April 2013
Charge for year
Disposals
On revalued assets
Freehold land
and buildings
Other
equipment
Total
£
£
£
1,275,000
930,139
18,070
(2,060)
2,205,139
18,070
(2,060)
75,000
946.149
2,269,149
75,000
1,350,000
76,500
25,500
710,098
107,336
(2,060)
786,598
132,836
(2,060)
(102,000)
815,374
815,374
130,775
£: 1,480,775
(102,000)
At 31 March 2014
Net book value
At 31 March 2014
£ 1,350,000
At 31 March 2013
£ 1,198,500
£:
£ 1,418,540
Page 29
THE ACT FOUNDATION
9a.
INVESTMENT PROPERTIES
Group
Investment
properties
£
Charity
Investment
properties
£
109,850,000
2,927,647
(2,705,000)
(5,540,000)
6,462,353
73,825,000
At 31 March 2014
£ 110.995.000
£ 71.945.000
At 31 March 2013
£ 109.850.000
£
Costivaluation
At 1 April 2014
Additions
Disposals
Reclassified as current assets
Revaluation
(2,705,000)
(5,540,000)
6,365,000
73.,{125,QOQ
All properties were valued as at 31 March 2014 by CBRE, Chartered Surveyors and D Taylor,
Director and Chartered Surveyor, all at an open market value. The historical cost at the yearend was £127,240,601 (2013: £127,458,094).
The net book value of investment properties which are freehold and leasehold properties at 31
March 2014 was £79,170,000 and £31,825,000 respectively.
At the year end the group reclassified certain investment properties from fixed assets to current
assets, reflecting a commitment made prior to the year-end to dispose of the assets.
Group
2014
£
Market Value
At 31 March 2014
£5.540.000
Charity
2013
£
£3., 5Q7, 563.
2014
£
2013
£
£5.540,000
Page 30
THE ACT FOUNDATION
9b.
INVESTMENTS IN SUBSIDIARIES
Charity
Subsidiaries
£
Valuation
At 1 April 2013
Un realised loss
46,092,151
(990)
£ 46,091,161
At 31 March 2014
The ACT Foundation owns the entire share capital of the following companies, except those
marked with a "', the results of which have been consolidated into these financial statements.
Name
Type of business
Aggregate of share
capital and reserves
£
ACG Rented
Properties Plc**
- Basepoint holding
company
Basepoint Centres
Limited
- group operating
company for managed
work space
Basepoint
Developments
Limited
- developer and project
manager for managed
work space
(55,349)
Compare Workspace
Limited*(75% owned)
- operation of internet site
comparing managed
workspace
(74,856)
16,256,570
2,500,078
Profit/(Ioss)
£
(990)
7,830
(394)
Huntley Close
Management
Company Limited**
All those companies that are held directly are marked with an '**'.
Details of net income/expenditure of trading subsidiaries are shown in note 2.
In addition to the above The ACT Foundation owns the entire share capital of the following
company which is treated as a programme related investment and is therefore not consolidated.
ACG Participacoes
Uda**
- owns land and buildings
in Brazil (see note 9c)
808,710
(36,178)
Page 31
THE ACT FOUNDATION
9b.
INVESTMENTS IN SUBSIDIARIES (CONTINUED)
Dormant companies
The Airways Housing Trust Pic
ACG Developments Limited
ACG Services Limited
Airways Charitable Trust Limited
Airways Homes IV Assured Tenancies Pic
Basepoint Limited
Gatehouse Properties Limited
Murehouse Properties Limited
Morley Lodge Properties Limited
Cleveland Park Management Company Limited
Basepoint Investments Limited
BHAT Limited
Welling & Partners Limited
All the companies within the group are incorporated in England and Wales under the Companies
Act 2006.
9c.
PROGRAMME RELATED INVESTMENTS
Group
Charity
2014
£
2013
2014
2013
£
£
£
625,000
200,000
648,844
750,000
200,000
648,844
625,000
200,000
642,344
750,000
200,000
1,473,844
1,598,844
1,467,344
1,592,344
125,000
125,000
125,000
125,000
£ 1,598,844
£ 1.723,844
£1,592,344
£1,717,344
Fixed Assets
Hollybank Trust Loan
Homeless International Loan
Brazilian School
Current Assets
Hollybank Trust Loan
Homeless International Loan
Total programme
related investments
The ACT Foundation Group own R$3,000,000 shares in ACG Participacoes Ltda which
represents 100% of the share capital of that company. ACG Participacoes Ltda owns the land
and buildings from which a Brazilian School is run for charitable purposes. In the Trustees'
opinion this investment should be accounted for as a programme related investment, as it is held
to facilitate the Group to further its charitable objectives and not for financial gain.
The deposit held with Homeless International was made interest free in support of funding for
housing projects in developing economies.
The purpose of the loan to Hollybank Trust is to assist with the construction of a high dependency
unit and respite unit for children and young adults, the loan is interest free with repayments over 8
years which commenced in the financial year ended 2013.
Page 32
THE ACT FOUNDATION
9d.
INVESTMENTS IN JOINT VENTURES
2013
£
2014
Group
£
Share of gross assets
Share of gross liabilities
101,491
(54,199)
£
Name
Managed Enterprise System
Hosting Limited
4Z,292
75,582
(37,967)
£
37,6.15
Description
of shares
held
Proportion of nominal value
of issued shares held by
the company
£1 ordinary
50%
Managed Enterprise Systems Hosting Limited is a 50:50 joint venture between Basepoint
Centres Limited and Stick man Technology Limited. The principal activity of the company is to
administer the development and sale of the MESH Broadband Controller System.
10.
MINORITY INTERESTS
Group
2014
£
At 1 April 2013
Share of profit and loss for the period
(18,616)
(99)
At 31 March 2014
(18,Z15)
The ACT Foundation holds 75% of the share capital of Compare Workspace Limited and
therefore the entity is fully consolidated in the group's financial statements. This leads to
Minority Interest relating to the remaining shareholders of Compare Workspace Limited.
Page 33
THE ACT FOUNDATION
11.
DEBTORS
Group
£
Amounts owed by group
undertakings
Amounts owed by
associated undertaking
Trade debtors
Other debtors
Prepayments and accrued
income
£
12.
Charity
2013
£
2014
2013
£
2014
£
3,471,547
2,373,670
48,410
566,698
12,960
35,232
490,207
13,551
158,393
6,300
92,354
5,750
170,820
568,739
15,044
332,317
798.888
£ 1.107.729
£ 3,651.284
£ 2.804.091
CASH AT BANK AND IN HAND
At 31 March 2014, cash balances with banks include £Nil (2013: £1.7 million) of cash deposits
which are subject to either a legal assignment or a charge in favour of a third party.
13.
CREDITORS: Amounts falling due within one year
Charity
Group
£
2013
£
360,961
3,100,445
475,612
2014
Bank overdraft
Trade creditors
Amounts owed to group
undertakings
Other taxes and social
security
Other creditors *
Accruals
Deferred income
2014
£
2013
£
26,547
3,100,445
180,280
26,432,908
26,432,909
700,573
1,694,121
2,911,227
553,761
1,489,985
2,297,274
664,938
138,925
36,174
933,359
26,817
55,954
490,727
664,938
£ 5,666,882
£ 8,582.015
£ 27,567.913
£ 30.952.070
* Included within other creditors are amounts owed to the dissentient shareholders of BHAT
Limited.
See note 14 for details on security,
Page 34
THE ACT FOUNDATION
14.
CREDITORS: Amounts falling due after more than one year
Charity
Group
2014
£
Loan notes
Bank loans (see below)
Accruals
2013
£
2014
£
2013
£
576,886
543,136
60,000,000
35,000
66,000,000
200,833
44,766,297
35,000
52,266,297
£ 60,518,:136
£ QQ, 777, 719
£ ~~,80:1 ,291
£ 52,4Q7, 130
200,833
Upon the purchase of Basepoint Ltd by ACG Rented Properties pic, a subsidiary of The ACT
Foundation, the shareholders were offered loan notes in ACG Rented Properties pic instead of
receiving the full cash amounts in one lump sum.
The loan notes accrue interest each year at a rate based on UBOR less 0.5% over that period
and will be finally repaid on 30 April 2015 unless they have been repaid before. They can be
repaid at the loan note holders request on 30 April any year (up until 2015).
The ACT Foundation has loan facilities available totaling £70m. These are five year interest only
loans with bullet repayments. The company has three hedging instruments in place to protect
itself against increases in interest rates in line with the group's interest rate management policy:
£10m at 3.6% until December 2015
£10m at 4.98% until August 2027, bank cancellable on an annual basis from August 2009
£10m at 4.7% until September 2027, bank cancellable on an annual basis from September
2009
The market value of the hedges, which have not been recognised in the statutory accounts, is as
follows:
2013
2014
£
£
Interest rate swaps
£
(5.920.616)
£ (9.291,284)
The ACT Foundation's loans are secured on the residential portfolio and commercial properties
held in The ACT Foundation and Basepoint Centres Limited.
Page 35
THE ACT FOUNDATION
15.
RESERVES
Group
Income and
expenditure
account
£
Reserve balances brought forward
Net income for the year
Minority interest
Unrealised gains on investments
Unrealised gains on freehold property
Transfers
Reserve balances carried forward
73,038,692
5,350,627
99
(1 ,305,866)
£ 77,083,552
Revaluation
reserve
£
(21,589,363)
6,462,353
177,000
1,305,866
£ (13,644.144)
Total
£
51,449,329
5,350,627
99
6,462,353
177,000
£ 63.439.408
Charity
Income and
expenditure
account
£
Reserve balances brought forward
Net incoming resources
Unrealised gains on investments
Unrealised gains on freehold property
Transfers
Reserve balances carried forward
16.
52,689,686
5,334,499
(1 ,305,866)
£ 56.718.319
Revaluation
reserve
£
(5,044,145)
6,364,011
177,000
1 ,305,866
£ 2.802.732
Total
£
47,645,541
5,334,499
6,364,011
177,000
£ 59.521.051
COMMITMENTS
The group had contracted capital commitments of £NiI (2013: £187,309).
Page 36
THE ACT FOUNDATION
17.
PENSION COMMITMENTS
The ACT Foundation participates in the Social Housing Pension Scheme (the Scheme). The
Scheme is funded and is contracted-out of the State Pension scheme.
It is not possible in the normal course of events to identify on a consistent and reasonable basis
the share of underlying assets and liabilities belonging to individual participating employers. This
is because the Scheme is a multi-employer scheme where the Scheme assets are co-mingled for
investment purposes, and benefits are paid from total Scheme assets. Accordingly, due to the
nature of the Scheme, the accounting charge for the period under FRS17 represents the
employer contribution payable.
The Trustee commissions an actuarial valuation of the Scheme every three years. The main
purpose of the valuation is to determine the financial position of the Scheme in order to address
the level of future contributions required so that the Scheme can meet its pension obligations as
they fall due.
The last formal valuation of the Scheme was performed as at 30 September 2011 by a
professionally qualified Actuary using the Projected Unit Method. The market value of the
Scheme's assets at the valuation date was £2,062 million. The valuation revealed a shortfall of
assets compared with the value of liabilities of £1,035 million, equivalent to a past service funding
level of 67.0%.
The Scheme Actuary has prepared an Actuarial Report that provides an approximate update on
the funding position of the Scheme as at 30 September 2013. Such a report is required by
legislation for years in which a full actuarial valuation is not carried out. The market value of the
Scheme's assets at the date of the Actuarial Report was £2,718 million. The Actuarial Report
revealed a shortfall of assets compared with the value of liabilities of £1,151 million, equivalent to
a past service funding level of 70%.
Contingent liability - Employer debt
The ACT Foundation has been notified by the Pension Trust of the estimated employer debt on
withdrawal from the Social Housing Pension Scheme based on the financial position of the
scheme as at 30 September 2013. As of this date the estimated employer debt for the ACT
Foundation was £1,701,079 (2013: £1,653,422).
A defined contribution scheme is also operated by The ACT Foundation Group. The assets of the
scheme are held separately from those of the company in an independently administered fund.
The pension cost charge represents contributions payable by the group to the fund and amounted
to £64,784 (2013 - £56,619).
Page 37
THE ACT FOUNDATION
18.
RECONCILIATION OF NET INCOMING RESOURCES TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
2014
£
Net incoming resources before investment gains and losses
Depreciation
Amortisation of goodwill
Bad debt provision reversed on acquisition of subsidiary
Interest received
Interest paid
Decrease/(increase) in debtors
Introduction of reserves - debtors at 1 April 2012
Increase/(decrease) in creditors
Introduction of reserves - creditors at 1 April 2012
(10,174)
3,540,692
308,841
19,479
£ Z,a9~,9a9
Net cash inflow from operating activities
19.
3,633,130
403,021
2013
£
3,021,345
431,125
18,652
(74,950)
(13,793)
3,507,675
(147,618)
3,909
(4,307,362)
(3,342)
£ 2,435.,641
ANAL YSIS OF CHANGES IN NET DEBT
At 1 April
2013
£
Cash at bank and in hand
Bank overdraft
Loans
Loan notes
Net debt
Cash flow
At 31 March
2014
£
£
8,464,626
(3, 100,445)
71,759
3,100,445
8,536,385
5,364,181
3,172,204
8,536,385
(66,000,000)
(576,886)
6,000,000
33,750
(60,000,000)
(543,136)
£(61,212,705)
£(52 I 006!Z5:l )
Page 38
THE ACT FOUNDATION
20.
TRUSTEE REMUNERATION AND BENEFITS
During the year the following amounts have been paid to Trustees in their capacity as trustees of
the charitable company.
£
Paul Nield:
Remuneration
18,750
Employers pension contributions
£
Denis Taylor (Chief Executive):
Remuneration
18.750
306,787
20,232
£ 327,Q19
Robert White:
Remuneration
17,500
£
Russell Meadows:
Remuneration
17,5QQ
3,750
£
3,75Q
These payments were made under the legal authority of the charity's Memorandum and Articles
of Association.
21.
RELATED PARTY TRANSACTIONS
As at 31 March 2014, the following balances were due from:
Compare Workspace Limited
Managed Enterprise System Hosting Limited
2014
2013
£
£
74,925
48,409
74,925
35,321
The group owns 50% of the issued share capital of Managed Enterprise System Hosting Limited.
During the year the group charged management fees totalling £48,409 (2013: £35,321) to
Managed Enterprise System Hosting Limited.
The group owns 75% (2013: 75%) of the issued share capital of Compare Workspace Limited.
During the year the group released £Nil of provision (2013: released £25) against amounts owed
by Compare Workspace Limited. The total provision against the balance detailed above is
£74,925. Following the acquisition in 2013 of additional share capital in the company the
provision has been released within the consolidated accounts.
The company has taken advantage of the exemption in Financial Reporting Standard 8 'Related
Party Disclosures' not to disclose transaction with other members of the group on the grounds
that 100% of the voting rights are controlled within the group.
Page 39
THE ACT FOUNDATION
DETAILED SCHEDULE OF GRANTS PAID
Individuals 411 (2013: 454)
2014
£
2013
£
432,198
499,025
Organisations 123 (2013:109)
ActiveS
ADSS
Age UK Bristol
Age UK Croydon
Age UK Lewisham & Southwark
Aidis Trust
Alzheimers
Arrow Riding Centre for the Disabled
ASPIRE
Autism Sussex
Bag Books
Balloons
Basic Needs Trust
Basement Project
Bedfordshire Garden Carers
BIBIC
BIME
Bobath Childrens Therapy
Bolton Lads and Girls Club
Breathtakers
Brecon & District Disabled Club
Bridge Care
Butterfly Hospice
Caldecott Foundation
Camphill Devon Community
Camphill Trust
Cancer Campaign in Suffolk
Cancer Link NE Scotland
Caring Breaks
Caring For Life
Castel Forma Specialist Care Centre
Chailey Heritage
Chernobyl Childrens Project
Child Aid to Russia and the Republics
Chiltern MS Centre
Christophers Smile
Compaid Trust
Core Arts Trust
Cotswold Volunteers
Disability Action Yorkshire
Disability Challengers
Disability Equality North West
Diverse Abilities Plus
Dogs For The Disabled
Down to Earth Farm
Durham County Carers
1,000
624
2,000
1,000
2,000
2,500
3,677
294
(10,000)
5,000
1,000
5,000
2,500
5,000
1,000
5,000
5,000
1,000
4,250
2,500
1,000
10,000
2,000
10,000
2,000
2,000
5,000
2,500
4,000
10,024
2,000
7,900
2,000
2,265
1,000
1,000
10,000
1,000
1,000
250
20,000
10,000
2,000
25,000
Russia
1,000
2,500
4,500
2,000
5,000
5,000
1,500
1,239
500
Page 40
THE ACT FOUNDATION
DETAILED SCHEDULE OF GRANTS PAID (CONTINUED)
Edinburgh Young Carers Project
Elizabeth Foundation
Ellenor Lions Hospice
Ethel Trust
Family Action In Our Region
Fifth Trust
Fircroft Trust
Fitzroy House
Fiveways Special School
Footsteps Foundation
Friends of Alderman Knight School
Friends of Hadrian School
Friends of Hartford Manor School
Friends of Mapledown School
Friends of Sherwood Park
Friends of South Devon College
Friends of The Elderly
Friends of the Thomas Wolsey School
Future Challenges
GADSAD
Grange Centre
Guideposts Trust
Halas Homes
Hallmoor School
HALOW
Hamilton Lodge Deaf Centre
Hamlet Centre Trust
Hampshire Riding Therapy Centre
Happy Days
Headway Edinburgh
HTF Kent
Home Start
Honeypot Children's Charity
Hopscotch Children's Charity
Ideal For All
Intersensory Club
In Touch
Integrated Neurological Services
Isabel Hospice
Jessie May Trust
Jigsaw Trust
Jubilee House Care Trust
Katherine House Hospice
Kiloran Trust
Kingwood Trust
Kirkwood Hospice
2014
2013
£
£
1,000
9,998
13,989
3,440
1,000
2,500
2,000
2,590
4,951
633
2,000
2,000
2,252
3,558
1,571
2,000
800
1,000
2,000
2,000
2,000
1,000
3,529
10,000
1,500
2,000
1,500
4,000
2,000
2,000
9,953
2,500
2,532
7,217
2,500
2,000
10,000
2,500
10,000
2,500
1,973
2,000
1,000
1,000
1,500
4,160
2,000
1,500
500
500
5,000
2,000
Page 41
THE ACT FOUNDATION
2014
£
Larches Trust
Life Cycle UK
Lifeworks Charity
Lin Berwick Trust
Limes Community and Childrens Centre
Llamau
Low Mill Outdoor Centre
Magdalen Environmental Trust
MAGPAS
MAGIC
Malvern Special Families
MariliacCare
Martha Trust
MedEquip4Kids
Medway Autism Group & Information Centre
MENCAP East Kent
MEN CAP Nottingham
MENCAP Sutton
MENCAP Waltham Forest
Michael Sobell Hospice
Moorvision
Movement Centre
MS Society Luton
Myasthenis Gravis Association
Myriad Centre
National Youth Advisory Service
Norman Laud Association
North London Hospice
Nottinghamshire Disabled People's Movement
Oasis Community Learning
Open Country
Options for Life
Options Supported Living
Out & About Trust
Outreach 3-Way
Over The Wall
Oxford PHAB Club
OXSRAD
PACE Centre
PACT
PARC
Pathway Workshop
Pauls Place Charity
Pennywell Youth Project
PHAB
Powerhouse for Women
Power International
2013
£
1,800
500
10,000
2,000
15,000
5,000
1,000
500
2,500
30,000
2,100
5,597
3,000
2,500
500
2,182
5,000
980
1,000
2,000
5,000
1,000
3,000
415
1,500
2,500
2,000
2,000
2,500
500
11,314
7,410
1,000
2,000
2,000
10,000
12,000
1,000
2,100
10,000
1,440
1,000
1,000
2,000
1,000
1,371
2,500
2,000
2,000
1,000
2,500
Page 42
THE ACT FOUNDATION
2014
£
Reach Out Plus
Reading Association For the Blind
Riverside RDA
Rossendale Trust
Royal Blind Society
Royal London SOciety for the Blind
Royal School for Deaf Children
Roy Kinnear Charitable Foundation
Ruskin Mill Educational Trust
SASBAH
SELFA
Sheltered Work Opportunities Project
Sick Children's Trust
Silver Birch Scotland
Skipton Extended Learning For All
Smile Support & Care
Society for Mucopolysaccharide Diseases
SOS Children
South Bucks Hospice
South Gwent Children's Foundation
SPACE
Special Needs Enterprises (Norfolk)
Spring Centre
St Barnabas Hospice
Stables Horse Activity Centre
Star Youth Club
Step By Step
Stick N Step
St Catherine's Hospice
St Elizabeth's Centre
St John's Community Centre
St Michael's Hospice
St Richard's Hospice
St Vincent's & St George's Association
St Wilfrid's Hospice
Style Acre
Sudbury Neighbourhood Centre
Sugarloaf RDA Group
Sunfields Children's Homes
Sunfield School
Surrey Care Trust
Sussex Beacon
Swindon Therapy Centre for Multiple Sclerosis
1,577
2013
£
1,187
2,000
500
2,500
1,500
1,500
2,000
2,120
5,000
3,000
1,000
5,000
2,000
3,000
1,000
659
2,500
500
7,451
2,000
1,000
10,000
2,000
2,000
2,000
9,077
3,423
1,450
10,000
2,174
10,000
2,000
1,000
1,877
1,775
2,000
2,000
3,000
2,500
1,000
10,000
6,802
5,000
3,170
2,000
2,000
10,000
(60)
2,500
5,773
Page 43
THE ACT FOUNDATION
2014
£
2013
£
2,000
Thamesdown Hydrotherapy Pool Association
Theatre Royal Stratford East
TOPCATS
Tools With a Mission - Africa
Tree of Hope
Trust Links
Ufton Court Education Trust
UK Youth
UNITE
University of Birmingham
Village Water - Zambia
WAMSAD
Warrington Youth Club
Wessex Autistic Society
Where Next Association
Wherever The Need - India
Whitby, Scarborough & Ryedale Disability Action Group
Winchester Young Carers
Wingate Special Children's Trust
Wolverhampton Therapy Centre
Woodlands Hospice
Wyvern Foundation Trust
Young Minds Trust
Zoe's Place Baby Hospice
41,100
1,000
3,000
10,000
2,000
2,000
2,000
1,000
2,000
2,500
2,000
1,500
10,000
1,000
33,500
1,500
9,832
10,130
15,000
10,000
2,000
5,000
1,000
2,000
2,500
1,000
2,500
Total
434,697
463,199
Grant pledges reversed during the year
Treloar Trust
First Step Trust
(88,333)
(63,075)
Grants pledged where payment is outstanding at the year end
Core Arts Trust
TOTAL DIRECT CHARITABLE DONATONS PLEDGED
25,000
£
715.487
£ 987.224
Page 44
THE ACT FOUNDATION
Outstanding pledges
Due within 1 year
Autism West Midlands
Core Arts
First Step Trust
Hollybank Trust
Surrey Care Trust
Treloar Trust
Due greater than 1 year
Autism West Midlands
Treloar Trust
Total outstanding pledges
2014
2013
£
£
25,000
52,500
100,000
25,000
110,000
12,000
7,181
75,000
77 2500
329,181
35 2000
25,000
175,833
35 2000
200,833
£ :112,500
£ 530,014
Page 45

ACT 2014 - Final Accounts PDF

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