the island of hoy development trust · i davidson k dobney p hall d jaques c lock a morris c morris...

Charity Registration No. SC038909

Company Registration No. SC306586 (Scotland)

THE ISLAND OF HOY DEVELOPMENT TRUST

DIRECTORS’ REPORT AND ACCOUNTS

FOR THE YEAR ENDED 31 MARCH 2013


LEGAL AND ADMINISTRATIVE INFORMATION

Directors T Bird

M Budge

M Collop

I Davidson

K Dobney

P Hall

D Jaques

C Lock

A Morris

C Morris

H Seatter

T Thomson

Secretary A. J. B. Scholes Limited

Charity number SC038909

Company number SC306586

Registered office 8 Albert Street

Kirkwall

Orkney

KW15 1HP

Accountants A. J. B. Scholes Limited

8 Albert Street

Kirkwall

Orkney

KW15 1HP

Bankers Bank of Scotland

56 Albert Street

Kirkwall

Orkney

KW15 1HJ


CONTENTS

Page

Directors' report 1 - 6

Statement of directors' responsibilities 7

Independent auditors' report 8 - 9

Consolidated statement of financial activities 10 Statement of financial activities 11

Consolidated balance sheet 12 Balance Sheet 13

Notes to the accounts 14 - 27


1

DIRECTORS' REPORT


The directors present their report and accounts for the year ended 31 March 2013.

The accounts have been prepared in accordance with the accounting policies set out in note 1 to the accounts

and comply with the charity's memorandum and articles of association, the Companies Act 2006 and the

Statement of Recommended Practice, "Accounting and Reporting by Charities", issued in March 2005.

Structure, governance and management

The charity is a company limited by guarantee and a registered Scottish charity no. SC038909. The charity's

governing document is its memorandum and articles of association.

The directors who served during the year were:

T Bird (Appointed 2 May 2012)

M Budge (Appointed 2 May 2012)

J Challoner (Resigned 2 May 2012)

M Collop

I Davidson (Appointed 20 February 2013)

K Dobney

D Hall (Appointed 2 May 2012 and resigned 10 October 2012)

P Hall

J Hardcastle (Resigned 1 May 2013)

D Hiscoke (Appointed 1 August 2012 and resigned 10 October 2012)

D Jaques

C Lock

P Newell (Appointed 2 May 2012 and resigned 12 June 2013)

T Thomson

None of the directors has any beneficial interest in the company. All of the directors are members of the

company and guarantee to contribute £1 in the event of a winding up.

At each annual general meeting, the members may elect any member to be a trustee. Trustees are subject to

retirement by rotation, as described in the articles of association.

The charity provides appropriate training and induction to all newly appointed trustees.

Significant strategic decisions are made by the trustees at board meetings which are held frequently

throughout the year. Less significant matters are delegated to staff and volunteers who are accountable to the

board of trustees.

The charity has two wholly-owned subsidiary companies, Hoy Energy Limited, which operates a community

wind turbine, and Hoy and Walls Community Transport Limited, which is dormant.

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.


DIRECTORS' REPORT (CONTINUED)


2

Objectives and activities

The charity’s objectives, as more fully detailed in its articles of association, are as follows: - Manage community land and associated assets for the benefit of the community of the Island of Hoy (“the

community”) and the public in general;

- Provide - in the interests of social welfare - facilities within the community for recreation and other leisure time

occupation;

- Advance education and, in particular, promote opportunities for learning for the benefit of the general public;

- Advance education through promotion of the arts

- Preserve, restore and improve the environment through the provision of public open space and other public

amenities;

- Provide housing for people in necessitous circumstances within the community;

- Promote training, which will assist participants in obtaining paid employment;

- Encourage and support volunteering;

- Preserve the historical, architectural and constructional heritage that may exist in and around the community;

- Promote and protect the wellbeing and physical health of the residents of the community;

- Advance education through the provision of learning activities and support;

- Promote other schemes and projects of a charitable nature for the benefit of the residents of the community.

The charity’s aims, including the differences it seeks to make through its other activities, are as follows: - Creating and maintaining partnerships with local groups, local agencies and national partners in the public,

private and charitable sectors

- Keeping the £ local/on island – generating and retaining wealth on the island.

- Promoting eco-awareness

- Ensuring sustainability of projects and initiatives

- Being community focused

- Promote & sustain local business and activities

- Promote grass roots community involvement

The charity’s main objectives for the year ending 31 March 2013 were as follows: Community Bus Service: As there is no public transport on Hoy, the key objective was to ensure travel

opportunities meet the needs of all residents, especially the disabled and elderly non car owners. Our surveys

highlighted the lack of community transport as a matter of concern, especially for non-car owners. Our proposal is

to provide community transport using low carbon vehicles by 2015. Services would run between Longhope and

Lyness and Hoy and Longhope to meet ferry services. By providing a community bus service, we will contribute

towards making Hoy a better place in which to live. Reduced pollution and low carbon transport solutions will

improve the environment. The bus service will also benefit tourists who visit without their own transport.

Community Hall: Upgrade, refurbish and extend the current building to create facilities for a community café. The

2009 Survey suggested that a community café would be an important addition to island life and enhance the tourist

experience of the South side of the island. The community hall is in much need of updating and usage of the hall is

falling because of the poor facilities. It was decided that funds should be sought to upgrade the hall incorporating

an extension to house the new facilities.

Affordable Warmth: The 2009 survey suggested that over 80% of the housing stock on the island is over 50 years

old. It also found that over 80% of the home insulation is below standard, over 30% glazing is below standard,

60% of heating systems are inefficient and below standard and around 60% of the population suffer fuel poverty.

The Home Insulation Scheme has helped a little, mainly by improving loft insulation for many homes on the island.

We continue to pursue opportunities to improve the housing condition of local homes, and reduce the carbon

footprint of the island.




3

Community Grants: - Through the operation of the wind turbine we are generating community funds which will be

accessible to the wider community to support a range of broad benefit to the community.

The strategies the charity adopted in relation to these objectives were as follows: Community Bus Service: A sub-group of board directors and members of the community was formed to manage

the project, obtain Big Lottery funding and deliver a bus service by Jan 2013. Providing local employment (in the

form of Bus Drivers) would contribute to our aim of on-island employment helping towards the sustainability of the

island population. Sourcing green vehicles would contribute to our commitment to eco-awareness.

Community Hall: A sub-group (comprising three IoHDT Directors and three of the existing Community Hall

committee members) was formed to obtain funding from various sources, plan the refurbishment and consult with

the wider community re plans.

Affordable Warmth: Pump-priming funding was sought (and awarded) from the Big Lottery Fund and used to

employ a Technical Development Officer to develop ideas (and obtain the necessary funding to undertake a pilot

project. Funding to up-skill existing contractors on the island would also be explored to promote sustainability of on-

island expertise and trades and to undertake the required work where possible.

Community Grants: With the implementation of the quality system - PQASSO, set up a policy and mechanism for

the distribution of grant funding for community use. Encourage members of the community and the Community

Council to be part of the grant allocation and distribution process to guarantee confidence in the process.

Achievements and performance Bus Service: The community bus service was operational by 17

th June 2013 with two hybrid (diesel/Electric)

vehicles now in use. Three local people have been employed as bus drivers. The service usage is growing week by

week and the response from the community has been extremely positive.

Community Hall: The community as a whole were in favour of the hall refurbishment and plans for the extension

have been accepted. The refurbishment of the hall has been delayed due to a minor legal issue (now resolved) and

is scheduled for completion early-mid 2014.

Affordable warmth: The initial stage has been successfully completed and funding outcomes achieved. There is

a now a model of how the needs of the community can be met, and further funding is currently being applied for to

move the project to its initiation stage, and to progress towards making a difference to fuel poverty on the island.

Community Grants: All policy and procedural aspects are now in place, with seven members of the community

comprising the grants panel. £40,000 pounds will be initially available to the fund in September 2013 when

applications will begin.

The Trust achievements were made through the use of volunteer and paid staff. Staff costs are included in note 10

to the financial statements; unpaid volunteers, including trustees, contributed significantly to the Trust’s

achievements during the year, their efforts amounting to more than 30hrs per week most of the year, although this

is difficult to measure economically, it should not be underestimated.

The Trust has granted a loan to Hoy Energy Limited with an interest rate to be applied of 2.25% over LIBOR from

April 2013 onwards. In the year to 31 March 2013 investment income includes £4,609 in respect of this loan.

The Trust has granted a lease to Hoy Energy Limited for the erection of its wind turbine, investment income of

£5,000 was received in the year in respect of this property.




4

Factors outside the charity’s control which are relevant to the achievement of the objectives:

- Working with various funders is always a challenge, especially when a project is multi-funded each funder has a different set of criteria to be met. This has to be factored in when time-scaling projects.

- Legal representatives have taken far longer than the timescales first given.

Financial review

The charity had total incoming resources of £306,904 and total resources expended of £109,504, giving net

income for the year of £197,400. Total funds as at the balance sheet date amounted to £337,711, split between

unrestricted reserves of £96,273 and restricted reserves of £241,438. The subsidiary had turnover of £404,368, a

profit after tax of £118,693 and balance sheet total of £37,580. After removal of inter-group transactions, the

group had total incoming resources of £631,001 and total resources expended of £304,950. Total funds as at the

balance sheet date amounted to £375,191, split between unrestricted reserves of £133,753 and restricted

reserves of £241,438.

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 months 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.

All areas of core operational expenditure were successfully funded by either specific grants or unrestricted funds

held by the Trust.

Funding support from HIE, OIC etc has enabled the Trust to develop robust internal financial and administrative

procedures and acquire resources to support them.

Other major funders have enabled several aspects of the Trust’s objectives to be constructively addressed and

these have been progressed through the year as reported above.

Projects have been held within budget or unrestricted funds have been utilised to complete them. The most

notable of these was an overrun on the Wind Turbine Development Officer funding of £8,319 during the year. This

amount was recovered from HEL as part of its internal salaries payments.

The Trusts investments in HEL have been fully honoured as per the agreed loan schedule, the investment

returned £119,000 net profit for the year with £40,000 of this being transferred to the Community Fund, and the

balance being used to build HEL’s agreed operating reserves.

Plans for the future

The future plans consist of: Community fund - Implementation of grant funding, from the operation of the wind turbine, which will be

accessible to the wider community for projects that support a range of benefits to the community.

Community Hall upgrade - We are now in a position, with funds from BLF and Leader in place to commence the

refurbishment of the hall and incorporate a multi-purpose extension, that will have a variety of uses,

Affordable Warmth - When grant funding has been obtained, work towards relieving fuel poverty on the island




5

Home Care - The trust is to look into the provision of care for the elderly on the island; working in partnership with

other organisations to help residents to be able to be adequately care for within their own homes.

Trust Structure - Using quality systems, and best practice guidance, the trust will work towards restructuring,

recording, reporting and recorded keeping. We are looking to attract new directors to the board including specific

directors concerned with youth and leisure, and IT awareness

Youth, Leisure and Heritage - we are looking to develop the range of activities and support available to young

people. The trust is also planning to explore and develop the potential of the heritage on the island, in particular,

that associated with the two world wars.

Subsidiary Performance Hoy Energy Ltd (HEL) is a wholly owned trading subsidiary of the Island of Hoy Development Trust (IoHDT). HEL’s objectives are primarily to manage the operation of the community wind turbine project at Ore Brae, Lyness, Hoy. The responsibilities associated with these objectives include ensuring its long term viability in terms of energy production and financial criteria for the project funders and relevant stakeholders/authorities such as HMRC and OFGEM, whilst maintaining surplus profits for tax efficient transfer to the community benefit fund managed by the IoHDT. Following completion of the objectives in any given financial year; all surplus funds from the trading operations of this company are transferred to the IoHDT as ‘gift aid’ under HMRC rules to maximise the charitable status of the IoHDT and also afford the largest potential for community benefit. HEL’s main objectives for the year ended 31 March 2013 were to continue building towards the targeted operational reserves to be held within the company (£308k) whilst also having a trading surplus to transfer to the community benefit fund by the end of the same period – as originally targeted and forecast. The company’s activities this year have focused on maximising operational parameters and reducing cost centres whilst targeting these main objectives. Achievements and Performance The turbine has generated at levels around 9% above the P50 target from the financial model in the first generation period (Oct 2010 to Nov 2011), but has since dropped due to lower wind yields and higher grid curtailment – monthly figures are reported to the IoHDT board of Trustees. Factors outside the control of HEL which are relevant to the performance of the project centre mainly around wind yield and grid connection availability from RPZ/ANM system under which the turbine is connected to the Orkney distribution grid. Financial Review Total revenue generated by HEL invoices for this financial year ending Mar 2013 was £404,368. The minimum levels of debt reserves required by the project funder (Co-op Bank) have been set aside (£170k) and will be available to the community again at the end of the 15 year loan period. The operational reserves for the project, targeted at £308k, currently stand at £200k. Targeted performance and expected costs, when compared to the project finance model, remain within projected limits for the period and also project forward as: - Annual loan repayments to project funders are circa £172k to the Co-op; and £14k to the IoHDT

- Annual lease payments to the IoHDT are circa £5k

- Annual operating/maintenance costs are circa £100k.




6

Disclosure of information to auditors

Each of the directors has confirmed that there is no information of which they are aware which is relevant to the

audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to

identify such relevant information and to establish that the auditors are aware of such information.

This report has been prepared in accordance with the special provisions contained within Part 15 of the

Companies Act 2006 relating to small companies.

On behalf of the board of directors

C Lock

Director

Dated: 16 October 2013


STATEMENT OF DIRECTORS' RESPONSIBILITIES

7

The directors, who also act as trustees for the charitable activities of The Island of Hoy Development Trust, are

responsible for preparing the Directors' Report and the accounts in accordance with applicable law and United

Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the directors to prepare accounts 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 accounts, 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 accounts 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 accounts comply with 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.


INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF THE ISLAND OF HOY DEVELOPMENT TRUST

8

We have audited the accounts of The Island of Hoy Development Trust for the year ended 31 March 2013 set

out on pages 10 to 27. 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 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 charitable company and its members as a body, for our audit work, for this report, or for the

opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the statement of directors' responsibilities, the directors, who also act as trustees

for the charitable activities of The Island of Hoy Development Trust, are responsible for the preparation of the

accounts and for being satisfied that they give a true and fair view.

We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland)

Act 2005 and under the Companies Act 2006 and report in accordance with regulations made under those

acts.

Our responsibility is to audit and express an opinion on the accounts 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 accounts

An audit involves obtaining evidence about the amounts and disclosures in the accounts sufficient to give

reasonable assurance that the accounts are free from material misstatement, whether caused by fraud or

error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the

parent charitable company's circumstances and have been consistently applied and adequately disclosed; the

reasonableness of significant accounting estimates made by the directors; and the overall presentation of the

accounts. In addition, we read all the financial and non-financial information in the Directors' Annual Report to

identify material inconsistencies with the audited accounts. If we become aware of any apparent material

misstatements or inconsistencies we consider the implications for our report.

We have undertaken the audit in accordance with the requirements of APB Ethical Standards including APB

Ethical Standard - Provisions Available for Small Entities, in the circumstances set out in note 19 to the

accounts.

Opinion on accounts

In our opinion the accounts:

- give a true and fair view of the state of the group's and the parent charitable company's affairs as at 31

March 2013 and of the group's and the parent charitable company's incoming resources and application

of resources, including the group's and the parent's 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, the Charities and

Trustee Investment (Scotland) Act 2005 and regulations 6 and 8 of the Charities Accounts (Scotland)

Regulations 2006 (as amended).


INDEPENDENT AUDITORS' REPORT (CONTINUED)

TO THE MEMBERS OF THE ISLAND OF HOY DEVELOPMENT TRUST

9

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial year for which the accounts are

prepared is consistent with the accounts.

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 and the

Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

- the parent charitable company has not kept proper and adequate accounting records or returns adequate

for our audit have not been received from branches not visited by us; or

- the parent charitable company's accounts 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.

Ivan Houston FCCA (Senior Statutory Auditor)

for and on behalf of A. J. B. Scholes Limited, Statutory Auditor

A. J. B. Scholes Limited is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

8 Albert Street

Kirkwall

Orkney

KW15 1HP

Dated: 16 October 2013


10

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT


2013 2012

Unrestricted Restricted TOTAL TOTAL

Notes £ £ £ £

Incoming Resources from Generated Funds

Voluntary income 2 407,668

223,251 630,919 347,063

Investment income 3 82 - 82 49

________ ________ ________ ________

407,750 223,251 631,001 347,112

Income from charitable activities 4 - - - -

________ ________ ________ ________

Total incoming resources

407,750 223,251 631,001 347,112

Resources expended 5 Cost of generating funds

261,558 - 261,558 178,216

Community activities

(67,347) 98,530 31,183 60,240

Governance costs

12,209 - 12,209 3,278

________ ________ ________ ________

Total resources expended

206,420 98,530 304,950 241,734

________ ________ ________ ________

Net income before transfers and taxation

201,330 124,721 326,051 105,378

Gross transfers between funds

(3,681) 3,681 - -

________ ________ ________ ________

Net income for the year before taxation

197,649 128,402 326,051 105,378

Taxation 6 (9,958) - (9,958) -

________ ________ ________ ________

Net income for the year after taxation

187,691 128,402 316,093 105,378

Fund balances at 1 April 2012

(53,938) 113,036 59,098 (46,280)

________ ________ ________ ________

Fund balances at 31 March 2013

133,753 241,438 375,191 59,098

________ ________ ________ ________

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

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

All incoming resources and resources expended derive from continuing activities.


11

STATEMENT OF FINANCIAL ACTIVITIES

INCLUDING INCOME AND EXPENDITURE ACCOUNT


2013 2012

Unrestricted Restricted TOTAL TOTAL

Notes £ £ £ £

Incoming Resources from Generated Funds

Voluntary income 2 3,300

223,251 226,551 94,946

Investment income 3 9,610 - 9,610 5,003

________ ________ ________ ________

12,910 223,251 236,161 99,949

Income from charitable activities 4 70,743 - 70,743 1,000

________ ________ ________ ________

Total incoming resources

83,653 223,251 306,904 100,949

Resources expended 5 Community activities

2,707 98,530 101,237 60,240

Governance costs

8,267 - 8,267 1,176

________ ________ ________ ________

Total resources expended

10,974 98,530 109,504 61,416

________ ________ ________ ________

Net income before transfers and taxation

72,679 124,721 197,400 39,533

Gross transfers between funds

(3,681) 3,681 - -

________ ________ ________ ________

Net income for the year before taxation

68,998 128,402 197,400 39,533

Fund balances at 1 April 2012

27,275 113,036 140,311 100,778

________ ________ ________ ________

Fund balances at 31 March 2013

96,273 241,438 337,711 140,311

________ ________ ________ ________

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

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

All incoming resources and resources expended derive from continuing activities.


12

CONSOLIDATED BALANCE SHEET

AS AT 31 MARCH 2013

2013 2012

Notes £ £ £ £

Fixed Assets Tangible assets 11

1,384,447

1,282,432

Investments 12

1

1

________

________

1,384,448

1,282,433

Current Assets Debtors 13 137,343

122,777

Cash at bank and in hand

470,468

262,448

________

________

Total current assets

607,811

385,225

Creditors: amounts falling due within one year 14 (115,451)

(29,115)

________

________

Net current assets

492,360

356,110

Creditors: amounts falling due after more than one year 15

1,476,659

1,564,445

Provisions for liabilities 16

24,958

15,000

________

________

Total assets less current liabilities

375,191

59,098

________

________

Income funds Funds retained within non-charitable

subsidiary

37,580

(81,113)

Restricted funds 17

241,438

113,036

Unrestricted funds

96,173

27,175

________

________

375,191

59,098

________

________

This report is prepared in accordance with the special provisions contained within Part 15 of the Companies

Act 2006 relating to small companies.

The accounts were approved by the Board on 16 October 2013

C Lock

Director

Company Registration No. SC306586


13

BALANCE SHEET

AS AT 31 MARCH 2013

2013 2012

Notes £ £ £ £

Fixed assets

Tangible assets 11 107,639 10,203

Investments 12 101 101

107,740 10,304

Current assets

Debtors 13 197,556 138,029

Cash at bank and in hand 61,845 4,870

Creditors: amounts falling due within

259,401 142,899

one year 14 (29,430) (12,892)

Net current assets 229,971 130,007

Total assets less current liabilities 337,711 140,311

Income funds

Restricted funds 17 241,438 113,036

Unrestricted funds 96,273 27,275

337,711 140,311

This report is prepared in accordance with the special provisions contained within Part 15 of the Companies

Act 2006 relating to small companies.

The accounts were approved by the Board on 16 October 2013

C Lock

Director

Company Registration No. SC306586


NOTES TO THE ACCOUNTS


14

1 Accounting policies

1.1 Basis of preparation

The accounts have been prepared under the historical cost convention.

The results for the group include those of Hoy Energy Limited.

The accounts have been prepared in accordance with applicable accounting standards, the Statement of

Recommended Practice, "Accounting and Reporting by Charities", issued in March 2005 and the

Companies Act 2006.

1.2 Incoming resources

Donations, legacies and other forms of voluntary income are recognised as incoming resources when

receivable, except insofar as they are incapable of financial measurement. Interest income is included

when receivable by the charity. The value of services provided by volunteers has not been included.

Income from grants is included in incoming resources when receivable, except when donors specify that

grants given to the charity must be used in future accounting periods, the income is deferred until those

periods.

1.3 Turnover Turnover represents amounts receivable for goods and services net of VAT and trade discounts.

1.4 Resources expended

Expenditure is included in resources expended on an accruals basis, inclusive of any VAT that cannot be

recovered.

Costs of generating funds comprise the costs associated with attracting voluntary income and the costs

of fundraising events.

Charitable expenditure comprises those costs incurred in the delivery of the charity's activities and services

for its beneficiaries. It includes both costs that can be allocated directly to such activities and those

costs of an indirect nature necessary to support them.

Governance costs include those costs associated with meeting the constitutional and statutory requirements

of the charity.

1.5 Tangible fixed assets and depreciation

Expenditure on fixed assets held for ongoing use by the charity is capitalised and depreciated over the

life of each asset. Tangible fixed assets other than freehold land are stated at cost less depreciation.

Depreciation is provided at rates calculated to write off the cost less estimated residual value of each

asset over its expected useful life, as follows:

Plant & machinery 5% straight line (wind turbines); 25% reducing balance (other plant) Fixtures, fittings & equipment 20 - 33% straight line

Motor vehicles 20% reducing balance

No depreciation is provided for on assets which are in the course of construction.




15

1 Accounting Policies (continued)

1.6 Investments

Fixed asset investments are stated at historic cost.

1.7 Foreign currency translation

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of transaction. All differences are recorded in outgoing resources.

1.8 Deferred taxation

Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.

1.9 Accumulated funds

Unrestricted funds are available for use at the discretion of the members in furtherance of the general

objectives of the charity.

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 accounts.

1.10 Group Accounts

The Consolidated Financial Statements include the results of the company and its subsidiary, Hoy Energy

Limited, drawn up to the 31 March each year.




16

2 Voluntary income - group

Unrestricted

Restricted

Total

Total

funds funds 2013 2012

£ £ £ £

Incoming resources from generated funds 404,368

-

404,368

252,117

Donations and gifts 800

11,201

12,001 285

Grants receivable for core activities 2,500 212,050 214,550 94,661

407,668

223,251

630,919

347,063

Generated funds

Unrestricted funds:

Income generated from subsidiary 404,368 252,117

404,368

252,117

Donations and gifts

Donations 12,001 285

12,001

285

Voluntary income - charity Unrestricted

Restricted

Total

Total

Unrestricted Restricted Total

Total

funds funds 2013 2012

£ £ £ £

Donations and gifts 800 11,201 12,001 285

Grants receivable for core activities 2,500 212,050 214,550 94,661

3,300

223,251

226,551

94,946

Donations and gifts Unrestricted funds:

Donations and gifts

Donations 12,001 285

12,001

285

Grants receivable include amounts received from Big Lottery Fund totaling £157,587 (2012: £18,720).




17

2 (Cont.)

Total Total

2013 2012

£ £

Grants receivable for core activities

Unrestricted funds:

Higlands and Islands Enterprise - 211

Orkney Islands Council/ Leader 2,500 2,500

2,500

2,711

Restricted funds:

Youth worker/ cafe 750 2,853

Wind turbine - 42,074

Community bus 130,364 2,803

South Isles Ranger 4,838 14,738

Acquire rowing boat and kit (1,395) 2,020

Community development officer 10,206 14,235

Turbine development officer 6,657 13,227

Admin & finance officer/ community devt officer 17,061 -

Website 240 -

Arctic convoy memorial 1,475 -

Big Lottery - community centre ("YM") 2,454 -

Big Lottery - affordable warmth 25,000 -

Community generators 14,400 -

212,050

91,950

3 Investment income Group Charity

2013 2012 2013 2012

£ £ £ £

Rental income - - 5,000 5,000

Income from unlisted investments - -

4,610

-

Interest receivable 82 49

- - 3

82

49

9,610

5,003

4 Incoming resources from charitable activities Group Charity

2013 2012 2013 2012

£ £ £ £

Turbine development costs recharged to subsidiary - - 70,743 1,000




18

5 Total resources expended - group

Staff

Depreciation

Other

Grant

Total

Total costs

£

£

costs

£

funding

£

2013

£

2012

£

Charitable activities

Community activities Activities undertaken

directly

48,990

19,433

(49,452)

-

18,971

46,208

Grant funding of

activities - - - 250 250 -

Support costs - 1,819 10,143 - 11,962 14,032

Sub total

48,990

21,252

(39,309)

250

31,183

60,240

Generated funds Direct costs – subsidiary

company

-

70,745

118,715

-

189,460

117,956

Support costs – subsidiary

company 34,661 561 36,876 - 72,098 60,260

Sub total

34,661

71,306

155,591

-

261,558

178,216

Governance costs - - 12,209 - 12,209 3,278

Total

83,651

92,558

128,491

250

304,950

241,734

Governance costs includes payments to the auditor of £7,410 (2012: £3,278).

Total resources expended - charity

Staff

Depreciation

Other

Grant

Total

Total costs

£

£

costs

£

funding

£

2013

£

2012

£

Charitable activities

Community activities Activities undertaken

directly 48,990 19,433 20,602 - 89,025 46,208

Grant funding of

activities - - - 250 250 -

Support costs -

1,819

10,143

-

11,962

14,032

Total

48,990

21,252

30,745

250

101,237

60,240

Governance costs - - 8,267 - 8,267 1,176

48,990

21,252

39,012

250

109,504

61,416

Governance costs includes payments to the auditor of £3,468 (2012: £1,176).




19

6 Taxation - group

2013 2012 £ £ Deferred tax: Origination and reversal of timing differences 9,958 -

7 Grants payable Group Charity

2013 2012 2013 2012

Grants to institutions: £ £ £ £

Hoy & Walls Community FC 250 - 250 -

250 - 250 -

8 Support costs Group Charity

2013 2012 2013 2012

£ £ £ £

Overheads 81,680 73,163 10,143 12,986

Depreciation 2,380 1,129 1,819 1,046

84,060

74,292

11,962

14,032

9 Directors

None of the directors (or any persons connected with them) received any remuneration during the year from the charity. However, two directors of the charity did receive remuneration from the subsidiary company totaling £4,000 (2012: two directors received £4,000).

During the year, two (2012: four) directors were reimbursed a total of £284 (2012: £433) for expenses

incurred in the course of their duties.




20

10 Employees

Number of employees Group Charity

The average monthly number of employees during the year was:

2013 2012 2013 2012

Number Number Number Number

Engaged in direct charitable activities 4 4 4 4

Engaged in subsidiary operating activities 2 2 - -

6 6 4 4

Employment Costs Group Charity

The average monthly number of employees during the year was:

2013 2012 2013 2012

£ £ £ £

Wages and salaries 78,691 66,079 45,786 43,674

Social security costs 4,960 3,612 3,204 2,534

83,651 69,691 48,990 46,208

There were no employees whose annual remuneration was £60,000 or more.




21

11 Tangible fixed assets - group

Fixtures,

Land and Plant and fittings & Motor Total

buildings machinery equipment vehicles

£ £ £ £ £

Cost

At 1 April 2012 2,790 1,342,998 4,468 2,000 1,352,256 Additions 21,649 75,885 3,549 94,240 195,323 Disposals - - (1,600) - (1,600)

At 31 March 2013

24,439 1,418,883

6,417

96,240 1,545,979

Depreciation

At 1 April 2012 - 67,217 2,607 - 69,824 On disposals - - (440) - (440) Charge for the year - 71,494 1,407 19,247 92,148

At 31 March 2013 - 138,711 3,574 19,247 161,532

Net book value

At 31 March 2013 24,439 1,280,172 2,843 76,993 1,384,447

At 31 March 2012 2,790 1,275,781 1,861 2,000 1,282,432

Tangible fixed assets - charity

Fixtures,

Land and Wind fittings & Motor Total

buildings turbine equipment vehicles £ £ £ £ £

Cost At 1 April 2012 2,790 3,740 4,468 2,000 12,998

Additions 21,649 - 3,549 94,240 119,438

Disposals - - (1,600) - (1,600)

At 31 March 2013

24,439

3,740

6,417

96,240

130,836

Depreciation

At 1 April 2012 - 188 2,607 - 2,795

On disposals - - (440) - (440)

Charge for the year - 188 1,407 19,247 20,842

At 31 March 2013 - 376 3,574 19,247 23,197

Net book value

At 31 March 2013 24,439 3,364 2,843 76,993 107,639

At 31 March 2012 2,790 3,552 1,861 2,000 10,203




22

12 Fixed asset investments

Investment

subsidiary

companies

£

Historical cost:

At 31 March 2012 & 31 March 2013 101

Investments are shown at historic cost because, in the opinion of the trustees, the costs of obtaining

meaningful market valuations outweigh the benefit to users of the accounts. The investments are held for

income rather than resale.

The charity holds more than 20% of the share capital of the following companies:

Country of registration or

incorporation

Shares held

Class %

Subsidiary undertakings

Hoy Energy Limited Scotland Ordinary 100

Hoy and Walls Community Transport Ltd Scotland Ordinary 100

The aggregate amount of capital and reserves and the results of these undertakings for the last relevant

financial year were as follows:

Capital and

reserves

Profit/(loss)

for the year

Principle Activities £ £

Hoy Energy Limited Renewable energy production 37,580 118,693

Hoy and Walls Community Transport Ltd Dormant 1 -




23

13 Debtors Group Charity

2013

£

2012

£

2013

£

2012

£

Amounts owed by group undertakings - - 170,282 125,537

Trade debtors 57,992 46,165 - -

Other debtors 68,363 60,925 27,274 10,624

Prepayments and accrued income 10,988 15,687 - 1,868

137,343

122,777

197,556

138,029

Amounts falling due after more than one year

and included in the debtors above are:

2013

2012

2013

2012

£ £ £ £

Amounts owed by group undertakings - - 156,920 125,537

Other debtors include grants receivable of £27,274 (2012: £10,555).

14 Creditors: amounts falling due within one year Group Charity

2013

2012

2013

2012

£ £ £ £

Bank loans 70,782 1,916 - -

Trade creditors 3,390 7,018 - -

Tax and social security 8,733 6,089 - -

Other creditors 13,579 - 13,579 -

Accruals 6,146 2,400 3,030 1,200

Deferred income 12,821 11,692 12,821 11,692

115,451

29,115

29,430

12,892

Deferred income includes a proportion of grants awarded as follows:

- Scottish Natural Heritage, in respect of the south isles ranger £3,554 (2012: £7,677); and

- Orkney Islands Council, in respect of the community development officer and the administration and

finance officer £9,267 (2012: £4,015).


NOTES TO THE ACCOUNTS (CONTINUED)


24

15 Creditors: amounts falling due after more than one year

Group Charity

2013

2012

2013

2012

Bank loans £ £ £ £

Bank loans 1,476,659 1,564,445 - -

Analysis of loans

Not wholly repayable within five years by installments 1,547,441 1,566,361 - -

Included in current liabilities (70,782) (1,916) - -

1,476,659 1,564,445 - -

Installments not due within five years

1,140,745

1,255,663

-

-

16 Provisions for liabilities - group

Deferred tax liability

Decommissioning

Total

£ £ £

Balance at 1 April 2012 - 15,000 15,000

Profit and loss account 9,958 - 9,958

Balance at 31 March 2013 9,958 15,000 24,958

A provision of £15,000 has been raised for the anticipated cost to Hoy Energy Limited of fulfilling its obligation

to decommission the Hoy community turbine at the end of its useful life

The provision of £9,958 for deferred tax related to accelerated capital allowances.




25

17 Restricted funds

The income funds of the charity include restricted funds comprising the following unexpended balances of

donations and grants held on trust for specific purposes:

Balance at 1 April 2012

Incoming resources

Resources expended

Transfers

Balance at 31 March

2013

£

£

£

£

£

Community development officer

10,206

(10,809)

603

-

Assistant financial officer & community development officer

17,061

(15,536)

(1,525)

-

Community bus Big Lottery Fund

130,364

(21,925)

-

108,439

Youth worker/ cafe

6,950

(4,500)

(2,308)

142

Wind development officer

6,656

(14,975)

8,319

- Community outcome BLF Fund 111,616

-

(144)

-

111,472

Community centre Big Lottery Fund

2,454

-

-

2,454

Affordable warmth Big Lottery Fund

25,000

(9,781)

-

15,219

Community generators

14,400

(14,400)

-

-

Other funds 1,420

10,160

(6,460)

(1,408)

3,712

113,036

223,251

(98,530)

3,681

241,438

Amounts were transferred from restricted funds following the acquisition of fixed assets out of the

respective funds. The net totals transferred in respect of capital expenditure were:

- Rowing boat £nil (2012: £1,000)

- Community bus £nil (2012: £3,543)

- Administration and finance officer £1,525 (2012: £nil)

- Wind development officer £684 (2012: £nil).

Amounts transferred from restricted funds following board recommendation and funding body approval were: - Ranger fund £1,372 (2012: £nil); - Website fund £36 (2012: £nil); and - Youth Cafe £2,308 (2012: £nil).




26

17 Restricted funds (cont.)

Transfers were made from unrestricted funds to cover costs incurred in excess of grant monies received

on certain restricted funds. The net totals transferred during the year were:

- Wind development officer £9,003 (2012: £4,809)

- Youth worker/ cafe £nil (2012: £20)

- Community bus £nil (2012: £1,044)

- Community development officer £603 (2012: £nil).

The community outcome BLF fund received grants of £nil (2012: £42,074) during the year.

18 Analysis of net assets between funds - group

Unrestricted funds

Restricted funds

Total

£

£

£

Fund balances at 31 March 2013 are represented by:

Tangible fixed assets 1,282,153

102,294

1,384,447

Investments 1

-

1

Current assets 441,446

166,365

607,811

Creditors: amounts falling due within one year

(88,230)

(27,221)

(115,451)

Creditors: amounts falling due after more than one year

(1,476,659)

-

(1,476,659)

Provisions and liabilities

(24,958)

-

(24,958)

133,753

241,438

375,191

Analysis of net assets between funds - charity

Unrestricted funds

Restricted funds

Total

£

£

£

Fund balances at 31 March 2013 are represented by:

Tangible fixed assets 5,345

102,294

107,639

Investments 101

-

101

Current assets 93,036

166,365

259,401

Creditors: amounts falling due within one year

(2,209)

(27,221)

(29,430)

96,273

241,438

337,711




27

19 Auditors' Ethical Standards

The relevant circumstances requiring disclosure in accordance with the requirements of APB Ethical

Standard - Provisions Available for Small Entities are that, in common with many charities of our size and

nature we use our auditors to assist with the preparation of the accounts.

20 Related parties

Administrative expenses include amounts totaling £6,381 (2012: £14,975) charged by Catalyst, a business

owned by Mr B Clegg, director of Hoy Energy Limited, for administrative services provided to the company.

Costs include amounts totaling £356 (2012: £nil) charged by Catalyst.

All services were charged on normal commercial terms.

The charity is controlled by the directors.

the island of hoy development trust · i davidson k dobney p hall d jaques c lock a morris c morris...

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