RICHMOND PARISH LANDS CHARITY

ANNUAL REPORT 2008 - Financial Highlights

Financial highlights 2007-2008

The year which ended on 30th June 2008 was a very successful year for the charity in a number of ways.

The level of grant giving to individuals and to local charities was increased by over 14% to £939,334, our highest level ever achieved. We increased further our estate of social housing properties and our financial commitment to this cause. By offering affordable rents we give a rent subsidy of some £855,000 each year, an average of £9,605 per household.  In addition during the last year we spent £267,000 on maintaining the properties and £194,000 on capital.

The Charity is reliant principally on the income from its investments which amounted to £1,091,843. The remaining income, £653,209, derives from rental income from our residential and investment properties. A small increase in our overall property incomes, and good control over administration and governance costs, means that the year ended with a further increase in our revenue reserves. Our endowed capital reserves increased strongly following the 5-yearly revaluation of our properties which was completed in June2008.

The decision to build up reserves, which was taken two years ago, appears wise in view of very recent falls in Stock Market values. These falls come at a time when we expect to see greater demands on the charity from individuals suffering from sharp increases in living costs, and from local charities trying to meet those needs. We are determined to maintain our support to individuals and to those key charitable organisations which make up some 80% of our funding through renewable core grants. 

We have had to review our long-term investment strategy in order to protect our capital against further decline.  This will result in a fall in income over the next few years.   We will therefore be required to call on some of our reserves in order to try and maintain the level of our grant-giving.

a) Investment policy and performance
The Charity’s investment strategy has remained unchanged. It is essentially an income strategy with the overall aim of generating sufficient funds to support our grant giving to the current generation while at the same time enabling future generations to benefit from the Permanent Endowment.  It seeks as far as possible to protect the capital and income in real terms through a diversified portfolio of equity, fixed interest and cash investments.   In order to achieve the stated objective the following asset allocation has been set: UK Equities: 60%,   Overseas Equities: 5%, Fixed Interest/Cash: 35%.  The period under review featured a very disappointing performance by the portfolio. At 30 June 2008 the total value of the investment portfolio of the Endowment Fund was £20,792,842 (2006/7: £24,896,038).  The total value of the Income Fund was £1,146,217 (2006/7: £1,338,327) and an additional £270,000 (2006/7: £170,000) in cash was held in the Special Fund.

b) Reserves policy
The Trustees seek to retain free reserves sufficient to enable it to meet expected recurring demands, together with exceptional requests in response to emergency need, during periods of falling investment income.  Reserves may also be required to fund working capital requirements. 

Following a review of the reserves policy in 2007, Trustees approved a level of reserves up to £900,000 which was considered to be the upper limit of what might be required at certain stages in the investment cycle. The actual level of general reserves at 30 June 2008 was £849,099 (June 2007: £840,310). The current level of reserves is therefore at the upper end of the range determined by the Trustees.

c) Designated reserve
The level of the designated reserve in June 2008 was £142,399 (June 2007: £249,937). It is held to meet the fluctuation in maintenance costs over the years on the charity's residential properties. The level of reserve was considered in May 2008 and is reviewed periodically.

© 2008 RPLC