The directors present their annual report and financial statements for the year ended 31 March 2022.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's Memorandum and Articles of Association , the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) " (effective 1 January 2019 ).
The charity's object is to provide services for people with learning disabilities. This work is inspired by the ideas of Rudolf Steiner, an Austrian philosopher, to recognise and value the uniqueness of each person and seeks to create a quality of environment, activities and social relationships enabling people to realise their potential.
The charity meets its objectives by providing day services to people with a learning disability.
The year 2021-22 has, inevitably, been one of consolidation and recovery from the turmoil of COVID and dealing with continued challenges arising from the pandemic.
Members, Families and Carers
During the year members began to return to an attendance pattern more akin to pre-COVID days. This had to be carefully managed taking account of the restrictions placed on care settings in Scotland. Progress was incremental and many challenges arose as we sought to ensure that the safety of members and staff was given priority. At the time of writing we are more or less operating as we did before the dark days of March 2020. Members and their families and carers were particularly hard hit by the pandemic and it is testament to the resilience of our members and their support systems that we are where we are today.
At our Mayfield site, which is our busiest with new members, and where we are developing additional capacity, we are actively engaged with local schools and developing transition arrangements for young people.
As 2022 progresses we are engaging with our waiting lists and seeking to provide suitable opportunities for those looking for a placement with the organisation. We anticipate being back to full capacity within the next few months and are looking at options for additional capacity.
As society emerges from the shadow of COVID our members are again being offered opportunities to take part in exhibitions of their work. During the year the “From the Ashes” Exhibition at the Custom House, Leith was a great success and a reminder to us all of the talent of our members. Participating in the wider community is a key strand of the work of Garvald Edinburgh and during 2022 we envisage that the volume of volunteering programmes, external visits, exhibitions and attendance at festivals will increase.
Our Staff and Volunteers
Garvald Edinburgh is very fortunate to have an experienced and capable workforce with low turnover. As a Board our focus has been on seeking to offer the best pay and terms and conditions we can within our budget capability. During the pandemic we held off recruiting staff but are now doing so and being relatively successful at attracting new staff when compared to others in our field of operation. We continue to be committed to ensuring staff are well trained in order than they can provide exceptional care and creative development opportunities for members. An autism module for all staff is being offered in tandem with our Positive Behaviour Support (PBS) programme. Our staff have performed remarkably well in the past year adapting to changing group sizes, ever –changing safety requirements and with members returning to day services after many months of disruption and being stuck at home. Reintegration of members has not always been straightforward as folk adjusted to new work requirements and processes. The need for staff to wear masks throughout the day made doing the basics so much more difficult but as always our staff rose to the challenge.
The organisation is always grateful for the work and dedication of our fantastic volunteers who contribute their time and expertise for the benefit of the organisation and the members who attend Garvald. As a result of the pandemic volunteers were unable to contribute in the way they had previously. Volunteers have, however, now been able to return and we are delighted to see many of them bank and able to restart this important role.
Buildings
Although the main redevelopment of our Gorgie Workshops was completed last year we have been undertaking further works to improve the condition of the building and deal with long standing issues with parts of the roof and with drainage systems. This work is ongoing but there is light at the end of the tunnel. Work is also underway to deal with maintenance issues at the Waterside site. The Board’s Premises Committee initiated work on a Conditions Survey of all of our buildings with a view to establishing a more robust maintenance programme to ensure all our sites offer high quality and safe working conditions for members and staff.
Finances
During the year the Finance Committee met regularly and with the active engagement of the CEO and the Company Secretary maintained close scrutiny of income and expenditure and of the Risk Register. We are very grateful for the efforts of managers and staff in controlling costs in times of great uncertainty. We are also very grateful for the continued support of our local Health and Social Care Partnerships and of a variety of Trust Funds who have supported our core costs and specific initiatives and projects. A special thank you goes to the Garvald Trust for their unwavering and generous support during difficult times.
We are also grateful to our individual supporters, and businesses and organisations, who have donated to us and have supported our work. We are also hugely grateful for the Trust and Giving Foundations who have supported us throughout the year. In addition to those Trusts whose support is detailed in the accounts we would also like to thank, the RS Macdonald Trust, the Turtleton Trust, The KPE4 Charitable Trust, The Cordis Trust and the Percy Bilton Charitable Trust, for showing faith in Garvald Edinburgh and its work through their financial support.
The Board
The Board continued to meet regularly during the year 2021-2022 initially by Zoom meetings but latterly in the normal manner. This allowed good governance to be observed and full discussion of both strategic and operational issues. A more modern set of Articles of Association was approved at the 2021 AGM.
A key activity during the year was engaging with Health and Social Care partnerships to ensure the role of building based day services was being properly understood and supported. Alongside this a conscious effort was made to maintain and develop relationships with key stakeholders and with politicians of all parties to highlight the work undertaken and the social benefits of our activity.
In a similar vein the Board approved expenditure to increase marketing activity about Garvald to help spread the word about what we contribute to the health and well- being of our members and of the society within which we work.
Although the Board’s focus during the year was of necessity on maintaining stability and bringing the organisation back into full operation there continued to be consideration given to development opportunities, most noticeably in Midlothian, but also looking at fulfilling our long held desire to improve our retail facilities. At the time of writing there is a strong prospect of positive developments on this front later in the year.
In March 2022 the Board and senior managers began a review of the organisational strategy published in 2018 and it is anticipated that a new strategy will be published after the 2022 AGM.
Duty of Candour Reporting
Garvald Edinburgh has produced a report on duty of candour which is available on our website. No incidents were reported during the year.
For the year ended 31 March 2022, the Statement of Financial Activities shows an overall surplus of £95,027 (2021 - £67,320) which has increased the overall funds to £3,318,726 (2021 - £3,223,699).
Of these funds £986,038 are available as unrestricted funds (2021 - £867,874) with, as detailed in the notes to the accounts, designated funds of £2,231,930 (2021 - £2,332,119) and restricted funds £100,758 (2021 - £33,706).
It is the policy of the charity that unrestricted funds which have not been designated for a specific use should be maintained at a level equivalent to between three and six month’s expenditure. The directors consider that reserves at this level will ensure that, in the event of a significant drop in funding, they will be able to continue the charity ’s current activities while consideration is given to ways in which additional funds may be raised. This level of reserves has been maintained throughout the year.
The Directors have assessed the major risks to which the charity is exposed and are satisfied that systems are in place to mitigate exposure to the major risks.
The charity is a company limited by guarantee and is governed by its Memorandum and Articles of Association.
The directors who served during the year and up to the date of signature of the financial statements were:
The d irectors are appointed in accordance with the Articles of Association. Trustees are recruited whose skills compliment the Board.
A board of no fewer than six and no more than twelve directors, who meet as they see fit, administer the charity. Responsibility for the management of day to day operations is delegated to a Chief Executive.
Garvald Edinburgh has a fairly flat management structure reflecting the need to keep administrative costs to a minimum. The Chief Executive is supported by a senior manager from each of the 4 main sites. This together with the Company Secretary constitutes the senior management team. This group meets regularly and ensures consistency of practice and policy implementation across the organisation.
Appropriate induction is given to director on appointment, Training and/or development in relevant areas is offered to directors and the need and opportunity arise.
The Board reviews remuneration levels on an annual basis taking into account levels of inflation, market rates and affordability.
The directors who also act as trustees for the charitable activities of Garvald Edinburgh are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company Law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Thomson Cooper were appointed as auditor to the company and a resolution proposing that they be re-appointed will be put at a General Meeting.
The directors' r eport was approved by the Board of Directors.
Opinion
We have audited the financial statements of Garvald Edinburgh (the ‘charity’) for the year ended 31 March 2022 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice) .
In our opinion, the financial statements:
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
We have nothing to report in respect of the following matters in relation to which the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:
the information given in the financial statements is inconsistent in any material respect with the directors' r eport; or
proper accounting records have not been kept; or
the financial statements are not in agreement with the accounting records; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the s tatement of directors' r esponsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with the Act and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below .
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: existence and timing of recognition of income, posting of unusual journals along with complex transactions and non-compliance with laws and regulations. We discussed these risks with management, designed audit procedures to test the timing and existence of revenue and tested a sample of journals to confirm they were appropriate. In addition, we reviewed areas of judgement for indicators of management bias to address these risks.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the officers and other management (as required by the auditing standards).
We reviewed the laws and regulations in areas that directly affect the financial statements including applicable charity and company law and considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.
With the exception of any known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the charity.
We communicated identified laws and regulations and potential fraud risks throughout our team and remained alert to any indications of non-compliance or fraud throughout the audit. However the primary responsibility for the prevention and detection of fraud rests with the trustees.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charity’s trustees, as a body, in accordance with regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
Thomson Cooper is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
d esignated
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
d esignated
Garvald Edinburgh is a private company limited by guarantee incorporated in Scotland. The registered office and principal place of business is 454/1 Gorgie Road, Edinburgh, EH11 2NR.
The financial statements have been prepared in accordance with the charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling , which is the functional currency of the charity . Monetary a mounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the directors have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Whilst the COVID-19 pandemic has created a degree of uncertainty, the Directors consider there are no material uncertainties that affect the charity's ability to continue as a going concern. Consequently, the Directors continue to adopt the going concern basis of accounting in preparing these financial statements. The Trustees have considered a period of 12 months from the date of the approval of the accounts when assessing the going concern basis.
Unrestricted funds are available for use at the discretion of the directors in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Donations are recognised when the charity has evidence of entitlement to the gift, receipt is probable and its amount can be measured reliably. Entitlement usually arises immediately upon receipt, however, in the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that those conditions will be fulfilled in the reporting period.
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. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Fixed assets (excluding investments) are stated at cost less accumulated depreciation. The costs of minor additions or those costing below £1,000 are not capitalised.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Property held as social investments are not depreciated as the directors deem the depreciable cost to be immaterial.
The directors estimate that the residual value of the property is not materially lower than its carrying value in the balance sheet as the charity has a policy of regular maintenance and repair which ensures the building is kept in good condition.
The residual value is estimated by considering similar properties of an age and state of repair equivalent to that anticipated at the end of the property's deemed expected useful life of not more than twenty years.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities .
At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any ) .
Stocks is included at the lower of cost or net realisable value after due regard for obsolete or slow moving stock.
Donated goods for resale are recognised at fair value on initial recognition, being the expected proceeds from sale less the expected costs of sale. Where it is impractical to estimate the fair value, the value to the charity of the donated goods sold is recognised as income when sold.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at the carrying value plus accrued interest less payments. The financing charge to expenditure is at a constant rate calculated using the effective interest method.
Trade and other debtors are recognised at the settlement amount due after any discount offered. Prepayments are valued at the amount prepaid after taking account of any discount due.
Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.
Grant income is deferred where the grant is subject to performance-related conditions and is received in advance of delivering services required. Where grant income is deferred it is accounted for as a liability and shown on the balance sheet as deferred income. Deferred income is released to income in the reporting period in which the performance related conditions that limit recognition are met.
Financial liabilities are derecognised when the charity ’s contractual obligations expire or are discharged or cancelled.
Provisions are recognised when the charity has a legal or constructive present obligation as a result of a past event, it is probable that the charity will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i s measured at present value , the unwinding of the discount is recognised as a finance cost in net income/(expenditure) in the period in which it arises.
The charity operates two defined contribution pension schemes. The assets of the pension schemes are held separately from those of the charity in an independently administered fund. The pension costs charged in the financial statements represent the contribution payable to the pension schemes by the charity during the year.
In preparing the financial statements, the Trustees are required to make estimates and assumptions which affect reporting income, expenses, assets and liabilities. Use of available information and application of judgement are inherent in the formation of estimates, together with past experience and expectations of future events that are believed to be reasonable under the circumstances. Actual results in the future could differ from such estimates.
Dilapidations are provided for on leased property where there is a clause in the lease to return the property to its original state on expiry of the lease. The provision is based on an assessment from a surveyor on the estimated costs of ongoing wear and tear by the end of the lease as can be seen at Note 15.
Government grants
Premises costs
Running costs
Travel and training costs
Interest and finance charges
Personnel
Running costs
Floor space
Interest and finance charges
Interest charges
Personnel
Premises costs
Floor space
Running costs
Floor space
Travel and training costs
Personnel
Interest and finance charges
Interest charges
Governance costs includes payments to the auditors of £ 9,029 (2021- £ 8,910 ) for audit fees.
None of the directors (or any persons connected with them) received any remuneration or benefits , or claimed expenses from the charity during the year (2021 - £nil).
The average monthly number of employees during the year was:
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The charge to profit or loss in respect of defined contribution schemes was £117,312 (2021 - £119,853).
Waterside Cooling Fans
Funding was received from The Beatrice Laing Trust to purchase cooling fans at Waterside.
Staff Training
A government grant was received to assist Garvald Edinburgh with meeting the qualification criteria set by the Scottish Social Services Council for registration.
Gorgie Workshop Refurbishment
Funds were received for the planned refurbishment of the Gorgie Road Workshops. The transfer of £454,636 in 2019/20 represents the restricted funds used for the refurbisment work which has been capitalised and held in Designated Reserves.
Day Services
Funds were received from Garvald Trust to fund the employment of two Day Service Managers.
Media Group
Funds were received to assist with the purchase of equipment for the Media Group.
Covid Support Funds
Funds were received towards support for additional costs incurred during the pandemic, such as purchasing ipads, phones, PPE and travel costs.
Bakery and Workshop goods
Funds were received towards costs of baking and materials for the Gorgie Workshop.
Greener Urban Environment
Funds were received towards working towards a greener urban environment for the land group.
Artists Professional Development
Funding from Creative Scotland to support the professional development of three talented learning disabled artists.
Bereavement Project
Funding provided by Edinburgh Napier University. The project is due to start in 2022/23 after being delayed because of the pandemic.
Adapt and Thrive
Funding from the Scottish Government to be used towards setting up an additional workshop at Mayfield.
These are unrestricted funds which are material to the charity's activities made up as follows:
Incoming resources
Resources expended
Transfers
Incoming resources
Resources expended
Transfers
Other fixed assets
This fund has been set up to carry the value of the freehold property and all fixed assets with the exception of tenants improvements.
Tenant's improvements
The purpose of this fund is to carry the value of the improvements made to the properties leased by the charity.
Gorgie Workshop Refurbishment
The purpose of this fund is to designate funds for the refurbishment of the Gorgie Workshop.
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
£178,535 (2021: £202,439) of lease payments were recognised as an expense during the year.
The remuneration of key management personnel, including employer's contributions to national insurance and pensions is as follows.
During the year the charity entered into the following transactions with related parties:
Four close relatives of three Directors received remuneration in the period as employees; all of whom were employed under normal terns and conditions. Total salary paid was £56,036 (2021 : £69,713).
One of the Directors provided fundraising services to the charity and was paid £10,475 (2020 : £13,086) for these services during her period as a Director.
The charity had no debt during the year.