CareTech Foundation Trustees’ Report 2020 >> Notes to the Financial Statements
1. General Information
CareTech Charitable Foundation is a private company limited by guarantee incorporated in England and Wales. The registered office Is 7th Floor, Metropolitan House, 3 Darkes Lane, Potters Bar, Hertfordshire, EN6 1AG.
The functional and presentational currency is GBP.
2. Accounting Policies
2.1 Basis of Preparation of Financial Statements
The financial statements have been prepared in accordance with the Charities SORP (FRS 102) Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (second edition – October 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.
Caretech Charitable Foundation meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.
2.2 Income
All income is recognised once the Company has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
Where the donated good is a fixed asset, it is measured at fair value, unless it is impractical to measure this reliably, in which case the cost of the item to the donor should be used. The gain is recognised as income from donations and a corresponding amount is included in the appropriate fixed asset class and depreciated over the useful economic life in accordance with the Company’s accounting policies.
On receipt, donated professional services and facilities are recognised on the basis of the value of the gift to the Company which is the amount it 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.
Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service.
2.3 Expenditure
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources.
Expenditure on charitable activities is incurred on directly undertaking the activities which further the Company’s objectives, as well as any associated support costs. Grants payable are charged in the year when the offer is
made except in those cases where the offer is conditional, such grants being recognised as expenditure when the conditions attaching are fulfilled.
Grants offered subject to conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.
All expenditure is inclusive of irrecoverable VAT.
2.4 Taxation
The Company is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Company is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.
2.5 Investments
Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance Sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the Statement of Financial Activities.
2.6 Debtors
Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
2.7 Cash at Bank and in Hand
Cash at bank and 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.
2.8 Liabilities and Provisions
Liabilities are recognised when there is an obligation at the Balance Sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.
Liabilities are recognised at the amount that the Company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.
Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Statement of Financial Activities as a finance cost.
2.9 Financial Instruments
The Company 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.
2.10 Pensions
The Company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Company to the fund in respect of the year.
2.11 Fund Accounting
General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Company and which have not been designated for other purposes.
Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Company for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.
3. Critical Accounting Estimates and Areas of Judgment
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions:
- Valuation of donated shares
- Valuation of gifts in kind
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
4. Income from Donations and Legacies
| Unrestricted Funds 2020 £ | Restricted Funds 2020 £ | Total Funds 2020 £ | Total Funds 2019 £ | |
|---|---|---|---|---|
| Donations | 662,542 | 103,215 | 765,757 | 335,412 |
| Donation of shares | 4,165,000 | - | 4,165,000 | - |
| Gifts in kind | - | 23,066 | 23,066 | 12,235 |
| 4,827,542 | 126,281 | 4,953,823 | 347,647 | |
| Total 2019 | 335,412 | 12,235 | 347,647 |
5. Other Incoming Resources
| Unrestricted Funds 2020 £ | Restricted Funds 2020 £ | Total Funds 2020 £ | Total Funds 2019 £ | |
|---|---|---|---|---|
| Other income | - | - | - | 70,507 |
| Total 2019 | 52,257 | 18,250 | 70,507 |
6. Analysis of Expenditure by Activities
| Activites Undertaken Directly 2020 £ | Grant Funding of Activites 2020 £ | Support Costs 2020 £ | Total Funds 2020 £ | Total Funds 2019 £ | |
|---|---|---|---|---|---|
| Skills development in care | 4,198 | 36,902 | 18,096 | 59,196 | 128,836 |
| Disabilities and mental health | 7,630 | 192,785 | 88,253 | 288,668 | 135,410 |
| Supporting communities | 27,947 | 188,439 | 95,287 | 311,673 | 81,938 |
| 39,775 | 418,126 | 201,636 | 659,537 | 346,184 | |
| Total 2019 | 5,231 | 229,301 | 111,652 | 346,184 |
In 2019 £30,485 was attributable to restricted funds and £315,699 was attributable to unrestricted funds.
Analysis of support costs
| Skills development in care sector 2020 £ | Disabilities and mental health 2020 £ | Supporting communities 2020 £ | Total Funds 2020 £ | Total Funds 2019 £ | |
|---|---|---|---|---|---|
| Staff costs | 12,113 | 59,069 | 63,774 | 134,956 | 66,316 |
| Management fees | 560 | 2,731 | 2,949 | 6,240 | 6,240 |
| Bank charges | 42 | 205 | 222 | 469 | 206 |
| General expenses | 451 | 2,200 | 2,375 | 5,026 | 1,830 |
| Insurance | 158 | 770 | 831 | 1,759 | 719 |
| Printing and stationery | 63 | 307 | 332 | 702 | 505 |
| Website costs | 468 | 2,283 | 2,466 | 5,217 | 150 |
| Staff training | 158 | 771 | 832 | 1,761 | 360 |
| Travel | 222 | 1,086 | 1,173 | 2,481 | 2,451 |
| PR cost | 1,400 | 6,828 | 7,372 | 15,600 | 7,200 |
| Marketing | 837 | 4,081 | 4,407 | 9,325 | 246 |
| Legal and professional | 434 | 2,117 | 2,285 | 4,836 | 20,990 |
| Audit and accountancy Services | 1,038 | 5,063 | 5,466 | 11,567 | 573 |
| Independent examiner fees | - | - | - | - | 3,282 |
| Subscriptions | 75 | 367 | 397 | 839 | - |
| Postage | 2 | 10 | 11 | 23 | - |
| Admin support | 75 | 365 | 395 | 835 | 584 |
| 18,096 | 88,253 | 95,287 | 201,636 | 111,652 | |
| Total 2019 | 41,553 | 43,672 | 26,427 | 111,652 |
7. Analysis of Grants
| Grants to Institutions 2020 £ | Grants to Individuals 2020 £ | Total Funds 2020 £ | Total Funds 2019 £ | |
|---|---|---|---|---|
| Skills development in care sector | 36,902 | - | 36,902 | 82,120 |
| Disabilities & Mental Health | 192,785 | - | 192,785 | 91,670 |
| Supporting communities | 70,402 | 118,037 | 188,439 | 55,511 |
| 300,089 | 118,037 | 418,126 | 229,301 | |
| Total 2019 | 203,001 | 26,300 | 229,301 |
The Company has made the following material grants to institutions during the year:
| 2020 £ | 2019 £ | |
|---|---|---|
| Name of institution | ||
| Barnardo’s | - | 50,000 |
| British Asian Trust | 100,000 | 50,000 |
| Birkbeck College | 83,332 | 41,670 |
| Hemraj Goyal Foundation | - | 12,500 |
| Care Workers Charity | 12,500 | 10,000 |
| EY Foundation | 30,000 | 9,840 |
| Skills for Care | 6,900 | 9,780 |
| National Care Force | 12,500 | - |
| Depaul UK | 9,453 | - |
| Other | 45,404 | 19,211 |
| 300,089 | 203,001 | |
| 300,089 | 203,001 |
8. Auditors’ Remuneration
| 2020 £ | 2019 £ | |
|---|---|---|
| Fees payable to the Company’s auditor for the audit of the Company’s annual accounts | 7,900 | - |
9. Staff Costs
| 2020 £ | 2019 £ | |
|---|---|---|
| Wages and salaries | 119,202 | 59,553 |
| Social security costs | 8,670 | 3,285 |
| Contribution to defined contribution pension schemes | 7,084 | 3,478 |
| 134,956 | 66,316 |
The average number of persons employed by the Company during the year was as follows:
| 2020 £ | 2019 £ | |
|---|---|---|
| Management and administrative staff | 3 | 3 |
The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:
| 2020 £ | 2019 £ | |
|---|---|---|
| In the band £70,001 - £80,000 1 | 1 | - |
The key management personnel of the Charity comprise the CEO, Foundation Manager and the Trustees. The total remuneration, including pension contributions and employers national insurance contributions of key management personnel was £120,091 (2019 – £37,637).
10. Trustees’ Remuneration and Expenses
During the year, no Trustees received any remuneration or other benefits (2019 – £NIL).
During the year ended 30 September 2020, expenses totalling £492 were reimbursed or paid directly to 3 Trustees (2019 – £59 to 1 Trustee). All expenses relate to travel expenses for their role as a Trustee.
11. Fixed Asset Investments
| Listed Investments £ | |
|---|---|
| Cost or Valuation | |
| Additions | 5,000 |
| Cost of donated shares | 4,165,000 |
| Unrealised gains | 130,000 |
| As at September 2020 | |
| 4,300,000 |
12. Debtors
| 2020 £ | 2019 £ | |
|---|---|---|
| Due within one year | ||
| Prepayments and accrued income | 5,237 | 37,243 |
| 5,237 | 37,243 |
13. Creditors: Amounts Falling Due Within One Year
| 2020 £ | 2019 £ | |
|---|---|---|
| Other taxation and social security | 3,333 | 3,820 |
| Other creditors | - | 1,137 |
| Accruals and deferred income | 10,500 | 3,282 |
| Grants accrued | 70,424 | 63,416 |
| 84,257 | 71,655 |
14. Financial Instruments
| 2020 £ | 2019 £ | |
|---|---|---|
| Financial assets | ||
| Financial assets measured at fair value through income and expenditure | 275,276 | 106,382 |
15. Statement of Funds
Statement of Funds – Current Year
| Balance at 1 October 2019 £ | Income £ | Expenditure £ | Transfers in/out £ | Gains/(Losses) £ | Balance at 30 September 2020 £ | |
|---|---|---|---|---|---|---|
| Unrestricted funds | ||||||
| General funds | 71,970 | 4,827,542 | (495,454) | (65,570) | 130,000 | 4,468,488 |
| Restricted funds | ||||||
| Staff hardship | - | 50,000 | (100,570) | 50,570 | - | - |
| Gifts in kind | - | 23,066 | (23,066) | - | - | - |
| Kit4carers | - | 20,703 | (24,217) | 10,000 | - | 6,486 |
| Connect the love | - | 512 | (3,730) | 5,000 | - | 1,782 |
| Championing | - | 32,000 | (12,500) | - | - | 19,500 |
| 126,281 | (164,083) | 65,570 | - | 27,768 | ||
| Total of funds | 71,970 | 4,953,823 | (659,537) | - | 130,000 | 4,496,256 |
Statement of Funds – Prior Year
| Income £ | Expenditure £ | Balance at 30 September 2019 £ | |
|---|---|---|---|
| Unrestricted funds | |||
| General Funds | 387,669 | (315,699) | 71,970 |
| Restricted funds | |||
| Gifts in kind | 12,600 | (12,600) | - |
| Staff hardship fund | 18,250 | (18,250) | - |
| 30,850 | (30,850) | - | |
| Total of funds | 418,519 | (346,549) | 71,970 |
Staff hardship fund
The Foundation receives a restricted donation from CareTech Holdings Plc to enable us to provide small grants to CareTech Holdings Plc staff and those who may have recently left the company who find themselves in significant financial hardship or at risk of becoming in significant fianacial hardship.
Gifts in kind
The gifts in kind comprise the rentable value of property and the apportioned salary costs of workers for services provided free of charge.
Kit4Carers
The Foundation receives restricted donations which support the work of Kit4Carers, a charitable project to raise funds, procure and distribute personal protective equipment (PPE) to carers of vulnerable members of society who are at increased risk of infection with COVID19.
Connect the Love
The Foundation receives restricted donations which enable Connect the Love, a charitable initiative to support digitally unconnected people, who are isolated in care homes, hospitals and vulnerable positions by providing devices to allow them to communicate with their loved ones.
Championing Social Care
The Foundation receives restricted funds for the Championing Social Care campaign, which strives to ensure a wider and deeper public understanding and appreciation for the social care sector.
Transfers
Transfers represent amounts contributed to restricted funds from the charity’s unrestricted funds.
16. Analysis of Net Assets Between Funds
Analysis of Net Assets Between Funds – Current Period
| Unrestricted funds 2020 £ | Restricted funds 2020 £ | Total funds 2020 £ | |
|---|---|---|---|
| Fixed asset investments | 4,300,000 | - | 4,300,000 |
| Current assets | 252,745 | 27,768 | 280,513 |
| Creditors due within one year | (84,257) | - | (84,257) |
| Total | 4,468,488 | 27,768 | 4,496,256 |
Analysis of Net Assets Between Funds – Prior Period
| Unrestricted funds 2019 £ | Total funds 2019 £ | |
|---|---|---|
| Current assets | 143,625 | 143,625 |
| Creditors due within one year | (71,655) | (71,655) |
| Total | 71,970 | 71,970 |
17. Reconciliation of Net Movement In Funds to Net Cash Flow From Operating Activities
| 2020 £ | 2019 £ | |
|---|---|---|
| Net income for the period (as per Statement of Financial Activities) | 4,424,286 | 71,970 |
| Adjustment for: | ||
| (Losses)/gains on investments | (130,000) | - |
| Decrease/(increase) in debtors | 32,006 | (37,243) |
| Increase in creditors | 12,602 | 71,655 |
| Share donation | (4,165,000) | - |
| Net cash provided by operating activities | 173,894 | 106,382 |
18. Analysis of Cash and Cash Equivalents
| 2020 £ | 2019 £ | |
|---|---|---|
| Cash in hand | 275,276 | 106,382 |
| Total cash and cash equivalents | 275,276 | 106,382 |
19. Analysis of Changes in Net Debt
| At 1 October 2019 £ | Cash flows £ | Changes in market value and exchange rate movements £ | At 30 September 2020 £ | |
|---|---|---|---|---|
| Cash at bank and in hand | 106,382 | 38,894 | 130,000 | 275,276 |
| 106,382 | 38,894 | 130,000 | 275,276 |
20. Pension Commitments
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £7,084 (2019 – £3,478) were payable to the fund at the balance sheet date and are included in creditors.
21. Related Party Transactions
During the year purchases totalling £2,550 (2019 – £Nil) were made from Earlsbrook Consulting Limited, a company controlled by the CEO, no amounts were outstanding at the year end.
